Heineken Lokpobiri, Nigeria’s minister of state for petroleum resources has claimed that the prolonged negotiation around the sale of ExxonMobil assets to Seplat has cost the country about 480,000 barrels per day (bpd) worth about $3.4 billion.
The minister’s comments come amid ongoing discussions between the two companies, which have been dragging on for months. The deal would see Seplat, a Nigerian oil and gas company, acquire ExxonMobil’s shallow water assets in Nigeria.
The minister argued that the delay has resulted in lost revenue for the Nigerian government.
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Lokpobiri explained that Nigeria was producing about 600,000bpd from the ExxonMobil assets that were now under divestment, pointing out that today, the production from the asset has dropped to about 120,000bpd.
He stated that if the problem hindering the divestment process was resolved and minimal investment was made in the asset, the country would be able to restore the production to 600,000bpd with the addition of 480,000bpd.
With that, in addition to condensate, which is outside the Organisation of Petroleum Exporting Countries (OPEC) computation, the minister maintained that the country was already delivering two million barrels.
Lokpobiri explained, “My own opinion is that look, we are in short of 480,000 barrels a day from that ExxonMobil-Seplat transaction.
“For the past two and a half years, oil has been moving around $80 a barrel. Four hundred and eighty thousand barrels a day, multiply it by two and a half years, it will give you about $34 billion.
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“When I was on this table, I was doing rough mathematics and I guess you have your phones. So, you can do the calculation. If one asset was doing about 600,000 barrels, because of certain problems, which we’re trying to resolve, production declined to 120,000 barrels, which means we’ve lost about 480,000 barrels a day.
“Multiply it by $80 a barrel. Every day, you’ll get about $34 million. Multiply it by two and a half years, you’re talking about over $30 billion. If $30 billion is injected into our economy today, I guess you guys will have to sell more of your dollars because dollar will naturally drop. This exchange rate is sometimes a question of demand and supply.”
As minister, with the mandate of the president, Lokpobiri said he would ensure that all problems hampering investment in the sector were resolved, beginning with the Seplat-ExxonMobil divestment issue.
“If from only that Seplat-ExxonMobil transaction, we have lost about $35 billion, imagine if that money was in Nigeria. Imagine if NNPC has about 70 per cent of that money. If they have that money to expand their investment, I believe that Nigeria will be in a better place,” he added.
Lokpobiri stated that the quickest way to the redemption of the Nigerian economic problems was through the oil and gas sector, arguing that no oil and gas-producing country fails to prioritise investment in the sector.
He said President Bola Tinubu had given him a mandate to ramp up production, adding that achieving that needs engagement and collaboration with all the relevant industry stakeholders.
