Nigerian Upstream Petroleum Regulatory Commission Confirms Divestment of 26 Oil Blocks Holding 8.211m Barrels Reserves

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The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has announced that International Oil Companies (IOCs) plan to divest 26 oil blocks containing 8.211 million barrels of oil reserves to indigenous companies.

NUPRC has engaged two top global oil and gas decommissioning consultants to conduct thorough due diligence on the identified 26 oil blocks set for divestment.

Mr. Gbenga Komolafe, the Chief Executive of NUPRC, disclosed this information during the Industry Dialogue on IOCs Divestment of Oil and Gas Assets in Abuja.

The workshop organized by NUPRC aims to provide guidance and ensure compliance with the relevant laws and processes governing the proposed divestment of oil and gas assets.

Notable acquisitions include Seplat acquiring Mobil Oil Producing Nigeria Unlimited (MPNU), Oando acquiring Nigeria Agip Oil Company (NAOC), Chappal Energies acquiring Equinor, and Renaissance acquiring Shell Petroleum Development Company (SPDC).

Komolafe highlighted that the blocks hold an estimated total reserve of 8.2 million 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, making a substantial contribution to the nation’s hydrocarbon resources.

He further emphasized that these blocks also 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. A significant portion of the P3 reserves is strategically located in or near producing assets, indicating potential for easy maturation to 2P reserves.

Moreover, the current average production from these blocks stands at 346,290 barrels per day (bpd), with the technical production potential estimated at 643,054 barrels per day. This potential increase in national production will benefit all stakeholders involved.

Komolafe identified S&P Global Commodity Insights (SPGCI) and Boston Consulting Group (BCG) as the leading global oil and gas decommissioning consultants who will collaborate with NUPRC as independent consultants to define end-of-field life and abandonment legacy liabilities in alignment with divestment guidelines. Their responsibilities will also include managing operational risks across the asset portfolio and developing a workflow for estimating total onshore decommissioning CAPEX liabilities.

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