Nigerian National Petroleum Corporation ( NNPC) on Monday said buyers of the divested assets of its Joint Venture ( JV), and partners have all failed to make meaningful impacts and contributions to the development of the assets, almost 10 years after their sale.
Speaking in Abuja at a round- table on “Rethinking the future of the Extractive Industry,” at the 25th Nigerian Economic Summit ( NES), group managing director of the NNPC, Mele Kyari, expressed disappointment over the sale of the JV assets to the new partners, noting that if the NNPC had a foreknowledge of the incompetence of the buyers, it would not had consented to the sale of the assets.
Going forward, he said the NNPC had rolled out stringent conditions for the divestment of assets by its JV partners, while he cautioned its partners against proposing the divestment of their stakes to firms not capable of improving the fortunes of the assets.
The NNPC chief executive noted that henceforth, firms seeking to acquire the assets of its JV partners must be able to manage the assets, attract financing and must be able to operate the assets.
He said, “In the last ten years, many of our partners have divested assets from the joint venture; some of the Production Sharing Contracts, PSC, have looked for other PSC contractors to join the business.
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“For the JVS and without exceptions, all the divestment from our partners to all the companies we are now working with, did not deliver the value that we expected. Many of the assets went down; most of them could not add any production to the baseline. That is the reality that we have on ground now.
“If we can roll back time and go back to 2010 up till 2012, NNPC would not grant those consents, if we had known this, because what the consent you are granting means is that they are bringing in a partner who would help you work the assets. If we know today that this cannot happen, we would not have consented to it.
“At that time, we did not have a choice, but today, we are in the best position to say no when we want to; we have a government that would tolerate us, support us and had insisted that we must do things correctly.
“Today, if you bring a partner who is on paper, an upstream operator, after the divestment is set, we will say no to it. That is the reality. It would also apply to our partners. This is a clear message to our partner, do not propose sale to people who cannot manage these assets, who cannot find financing and who cannot operate these assets.
“Indeed, the NNPC has the option of either preempting the transaction or to decline the consent of we are not convinced, especially if you are not able to give us the partner that would be able to do business as we expect.”
