PIA : Senate To Investigate Potential Exits Of IOCs

By James Itodo

The Senate has called on its Committees on Petroleum downstream and Gas to conduct a holistic investigation on implementation of the Petroleum Industry Act (PIA).

It specifically called on the committee to holistically investigate the potential exits of International Oil Companies (IOCs)from Nigeria.

The resolution of the red chamber followed the adoption of a motion on “Urgent Need For Enquiry Into Implementation Of The Petroleum Industry Act, (PIA) 2021with Regards to Potential Exit of International Oil Companies (IOCS) from Nigeria: Case of ExxonMobil in Akwa Ibom State by Senator Etim, Aniekan.

Aniekan said that the discovery of oil and gas in commercial quantity in Nigeria saw to the arrival of International Oil Companies (IOCs) such as Shell PB, Mobil Producing Nigeria Unlimited, which later merged into ExxonMobil) Nigerian Agip Oil Company (NAOC) among others.

He said the coming of the IOCs in Nigeria was for the purpose of further exploration, development and production in the oil and gas sector.

He said the IOCs went into Joint Venture (JV) contracts with the Federal Government through the NNPC Ltd.

Aniekan said the case in point was the JV where the NNPC holds 60 per cent while ExxonMobil holds 40 per cent shares in the JV between the NNPC and ExxonMobil.

According to him, the responsibilities for injection of capital expenditure into the JV and the proceeds of same are shared in corresponding proportions.

He said ExxonMobil offered to sell its entire onshore and shallow water facilities and business in Akwa Ibom State which has established fields and high-quality operations with highly skilled local operational teams.

Aniekan said the company also has track record of safe operations, high production rate as well as crucially extensive footprints in Akwa Ibom State.

He said it was in preparatory to its exit from the onshore and shallow water operations in the state to focus on deepwater production.

Senator Aniekan said it was curious that NNPC has the Right of First Refusal (RFR) and has notified ExxonMobil of its intention to exercise that Right of Pre-emption on ExxonMobil’s planned sale of its entire asset in Nigeria’s onshore and shallow waters.

He however, said that ExxonMobil proceeded to seal a deal with Seplat Energy PlC for that purpose.

According to him, the Petroleum Industry Act (PIA) 2021 was enacted to provide legal governance, regulatory and fiscal framework for the Nigerian Petroleum Industry and address the multifarious challenges in the sector which is still the main stay of the country’s economy.

He said the PIA has not made clear implementation plans for situations such as the now emerging trend of exit of the IOCs.

The Senator also said the PIA has not holistically resolved issues bothering on protection of interest of the Federal Government, producing states, host communities or provided future assurances in the handling of situations such as the issue now in focus.

The lawmaker expressed concern about the potential adverse effects of the exit of ExxonMobil from Akwa Ibom State including high loss of jobs, exit of professionals and service companies, loss of revenue and abandonment of certain yet to be satisfied obligations.

Edited By Grace Namiji