• Monday, May 20, 2024
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NNPC denies knowledge of Chevron’s plan to sell oil blocks

NNPC denies knowledge of Chevron’s plan to sell oil blocks

The Nigerian National Petroleum Corporation (NNPC) has said it was not officially aware of the planned moves by United States oil giant, Chevron, to divest interest in Oil Mining Leases (OML) 83 and 85 offshore Nigeria.

According to Omar Farouk, general manager, media relations department, group public affairs division, NNPC, when the matter is brought to the table the NNPC would be able to decide what is right to be done.

But investors who spoke with BusinessDay said that NNPC only have a preemptive clause which means that Chevron does not have to consult NNPC before it sells its shares, but rather it can only request to match the price of other investors. In this case, it can be in full control of the assets.

Ronke Onadeko, managing director, Deltr Energy, said: “As I earlier said this year, there seems to be a divestment drive from Nigeria by oil companies as their head offices re-strategise and deploy their funds to more efficient production markets. Some of the reasons are lack of passage of the PIB, security issues, and today’s high cost of funds which needs to be used maximally.”

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It may be recalled that NNPC had made a similar statement, denying knowledge of sales of assets by Shell, claiming that Shell did not have the right to sell the assets because they did not belong to the company alone.

According to NNPC then, “We are not aware of any talks with NNPC regarding the sale of Shell assets in Nigeria. Shell cannot on its own unilaterally say it wants to sell anything that does not belong to it alone”.

The planned divestment by Chevron is coming amidst reports that the National Assembly would give priority attention to the Petroleum Industry Bill (PIB), intended to overhaul the nation’s energy sector, which would redefine its relationship with foreign oil partners in its next sitting late this month.

The PIB aims to break NNPC, long hampered by funding shortfalls which have affected its joint ventures, into private profit-driven units able to tap international capital markets. The move could prompt some of the biggest financing deals of their kind ever done in Africa.