FG will scrutinise new investors in divested assets — Sylva

Federal Government says it will scrutinise oil companies that will bid for the takeover of assets that Shell and other oil majors will be divesting from in the country.

Our correspondent reports that the Minister of State for Petroleum, Chief Timipre Sylva, disclosed this on Wednesday at a breakfast meeting organised by the African Energy Future in Houston, Texas, U.S.

Our correspondent recalls that Shell and ExxonMobil have indicated their interests to divest from onshore and shallow water assets in Nigeria.

Speaking at separate business meetings with top managements of Chevron and Schlumberger at their headquarters, in Houston, Texas, Sylva said government would carry out due diligence in the selection and eventual approval of any company that would take over the assets from which these companies intend to divestment.

He stated that the previous practice where by companies are just allowed to purchase strategies without verifying their capacity to operate such assets would no longer be tolerated.

“In the past, companies were just allowed to buy assets that they had no capacity to operate.”

“We would no longer allow that to happen again because Government is the ultimate loser. If they are not able to operate such assets optimally, government won’t be able to generate revenue from such assets.”

“So, we are going to do our best to ensure that we get the best value from these assets,” Sylva said.

He told Chevron and Schlumberger team that government would create the enabling environment for them to increase their investments in Nigeria.

He noted that with the passage of the Petroleum Industry Act (PIA), Nigeria would increase the incentives for investments in the oil and gas sector of the economy.

“With PIA, we now have the enabling laws that protect and make the operating environment more attractive.”

“With the passage of the PIA, there are a lot of interests in the oil and gas sector in Nigeria today.”

“The responses we have gotten from investors so far are quite good. Everybody is quite happy,” Sylva added.

He said that the Nigerian government while willing to encourage new investors, would open its doors first to those who already have business and investments in the country.

The minister while speaking on cost optimisation, security of oil and gas assets, and domestic gas utilisation, called for more investments in the sector.

He urged the African continent to find solution to the African problem or the world would leave Africa behind.

Sylva said with the ban on African countries due to the Omicron COVID-19 variant and the rush for energy transition, the continent leaders need to look for urgent financing solution if the continent will continue to play key roles in the hydrocarbon sectors.