Recent reports suggest that Nigeria is set to increase its daily oil production volume by 700,000 barrels per day, bringing it up to two million bpd by the end of the year.
This boost in production is expected to come from indigenous businessmen taking over multi-billion dollar facilities, which have been delayed to ensure strict adherence to the Petroleum Industry Act (PIA).
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has made it clear that all interested parties in Joint Ventures (JV) must resolve their differences before the regulatory function can be performed as per the new law.
This is in line with the NUPRC's commitment to the free entry, free exit business principle aimed at encouraging investors in the sector.
The NUPRC is expediting approvals and divesting IOCs to increase oil production, with a Seplat Energy acquisition of Mobil Oil Producing Nigeria Unlimited (MPNU) expected to ramp up output by 300,000 bpd to 400,000 bpd.
The divestments include the Mobil-Seplat deal, which is expected to significantly increase output when the new owners begin their investment.
Other pending transactions include Eni-Oando's September 2023 agreement for the sale of Nigerian Agip Oil Company Ltd (NAOC) and Equinor's Nigerian business sale to Nigerian-owned Chappal Energies.
Shell has also agreed to sell its Nigerian onshore oil assets to Renaissance, a consortium of four Nigerian firms and one foreign company, for $2.4 billion. This will be subject to approval by the federal government.
Despite the speculations about Chevron's planned divestment, the IOC has increased the Usan and Agbami oilfield leases until 2042 and has increased its investment emphasis on short-cycle projects.
Chevron operates the Agbami Field, which lies 70 miles (113 km) off the coast of the central Niger Delta region and spans 45,000 acres (182 sq. km).
To accelerate the process, the NUPRC has given the participating companies two options: to either hold on until the ongoing audits are concluded before the consummation of the process or move ahead pending when the review is completed.
However, the IOCs and the buying parties would have to accept the outcome of the ongoing audit wholesale if they decide to proceed without the final report being published.
The audits have certain pillars of regulation that include host communities, statutory taxes, remediation, and recovery, among others. Host communities are critical because they will want host companies to be happy.
The commission is pushing for production to exceed 2 million barrels a day before the end of December with this new move.
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