Gbenga Komolafe, the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), made this known at the Industry Dialogue on IOCs Divestment of Oil and Gas Assets in Abuja on Friday.
Komolafe said the NUPRC had engaged two leading global oil and gas decommissioning consultants including S&P Global Commodity Insights (SPGCI), and Boston Consulting Group (BCG) to carry out due diligence on the proposed 26 oil blocks to be divested.
The workshop was organized by the Commission to guide and consider due diligence and interrogation on compliance with the laws and processes that governed the proposed divestment of oil and gas assets.
Seplat is acquiring Mobil Oil Producing Nigeria Unlimited (MPNU), Oando is acquiring Nigeria Agip Oil Company (NAOC), Chappal Energies is acquiring Equinor, while Renaissance is acquiring Shell Petroleum Development Company (SPDC).
Komolafe said the blocks had an estimated total reserve of 8,211million barrels of oil, 2,699 million barrels of condensate, 44,110 billion cubic feet of associated gas and 46,604 billion cubic feet of non-associated gas, adding that they are huge contribution to the nation’s hydrocarbon resources.
The NUPRC boss said: “Additionally, these blocks contain P3 reserves estimated at 5,557 million barrels of oil, 1,221 million barrels of condensate, 14,296 billion cubic feet of associated gas and 13,518 billion cubic feet of Non-Associated Gas.
“It is worth noting that a substantial part of the P3 reserves is located in or near producing assets. This means that a competent successor can easily mature them to 2P reserves.
“Additionally, the current average production from these blocks is 346,290 barrels per day (bpod) (NAOC-28,018 bopd, MPNU-159,378 bopd, EQUINOR-36,155 bopd and SPDC-122,739 bopd).
“But the technical production potential is much higher – standing at 643,054 barrels (NAOC-147,481 bopd, MPNU-244,268 bopd, EQUINOR-39,203 and SPDC-212,102 bopd).
“These blocks have the potential to significantly boost our national production, which will benefit all stakeholders.”
According to the NUPRC boss, the global oil and gas decommissioning consultants would also work with the Commission as independent consultants in defining all end-of-field life and abandonment legacy liabilities in compliance with divestment guidelines.
“They will also manage the operational risk across the entire asset portfolio, create a workflow for estimating total onshore decommissioning CAPEX liabilities.
“They will determine the host community’s obligations based on three per cent OPEX stipulated in the Petroleum Industry Act (PIA), benchmark best practices on asset sales, and provide case study reports that draw lessons based on best practices, ” Komolafe said.
Komolafe sald that the Commission’s regulatory goal was to ensure that parties in the divestment process conform to the approved divestment guidelines.