International Oil Companies (IOCs) participating in the Nigerian oil industry may dump Nigerian oil assets worth over $12 billion (N4 trillion) as rumors swell regarding plans not to seek renewal of licenses to some oil assets when they expire in the next few years.
Reports from The Guardian Newspaper revealed that already, three of the IOCs have divested from 24 OMLs (operating mining licenses) since 2014. This, however, has allowed more indigenous firms to participate in the Nigerian oil upstream sector.
Since the divestment began in 2014, indigenous firms have invested about $10 billion in the upstream sector, acquiring and developing relinquished oil assets.
Shell Petroleum Development Company (SPDC), Nigeria’s biggest oil sector operator, has over 17 OMLs set to expire by 2019.
There are reports that it might be looking to divest a number of these assets or pass up the opportunity to renew a few of these licenses. In such an event, this would give room to more local participation in the Nigerian upstream sector of the oil industry.
Some of the top IOCs that have sold off some of their assets include Agip, Shell, and Chevron, with indigenous companies like Seplat benefiting immensely from these divestments.
Seplat’s CEO, Austin Avuru, said that he expects a large volume of reserves to be available soon as many OMLs are nearing expiration, “particularly the Shell Joint Venture licences in 2019.”