Nigeria’s Oil Regulator Assures Workers Amidst IOC Divestments

The Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, has sought to allay fears over potential job losses as international oil companies (IOCs) continue to divest their onshore assets in Nigeria. Komolafe made these remarks during the Energy and Labour Summit 2024, organised by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) in Abuja.

Addressing concerns over the exodus of IOCs and the impact on the workforce, Komolafe emphasised the NUPRC’s commitment to safeguarding jobs and facilitating the transfer of skills from these international operators to the indigenous companies that are set to acquire the divested assets. “Regarding the workforce in this transition era, the commission is committed to safeguarding jobs and ensuring the transfer of skills from IOCs to indigenous companies,” Komolafe stated.

Highlighting the NUPRC’s role in shaping the future of Nigeria’s oil sector, Komolafe outlined the commission’s mandate to create a regulatory environment that encourages investment, drives innovation, and ensures the responsible management of the nation’s natural resources. He revealed that a comprehensive divestment framework has been put in place to guide asset transfers in the upstream petroleum sector, focusing on technical capability, financial robustness, and legal considerations.

Represented by NUPRC Executive Commissioner for Development and Production, Mr. Enorense Amadasu, Komolafe acknowledged the significant industry debate sparked by the divestment of IOCs from Nigeria’s upstream oil and gas sector. Over the past decade, the Nigerian oil and gas landscape has undergone a notable shift, driven by global energy transition goals, financial prudence, and evolving regulatory landscapes.

Komolafe underscored the importance of the energy sector in fostering socio-economic development, advocating for a progressive approach that embraces innovation, collaboration, and adaptability amid fluctuating oil prices, geopolitical shifts, and the urgent need for decarbonisation. “As we convene here amidst unprecedented challenges and transformative opportunities, we must recognise the pivotal role that the energy sector plays in driving socio-economic development and prosperity,” he remarked.

He further stressed the necessity of harnessing technology, diversifying energy sources, and fostering partnerships that transcend borders and ideologies to navigate the complexities of the global energy market effectively.

The NUPRC’s reassurances come at a time when several major IOCs, including Shell Petroleum Development Company, Nigeria Agip Oil Company, Mobil Producing Nigeria Unlimited, and Equinor, are set to divest their stakes in 26 oil blocks across Nigeria. These blocks, according to Komolafe, hold substantial hydrocarbon reserves, with an estimated total of 8.211 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.

Komolafe highlighted the strategic significance of these resources, noting, “These blocks have an estimated total reserve of 8.211 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. This is a significant contribution to the nation’s hydrocarbon resources.”

Furthermore, the blocks also contain considerable probable reserves, with 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. Komolafe pointed out that a significant portion of these P3 reserves is located near or within currently producing assets, suggesting that “a competent successor could easily mature them to 2P reserves,” highlighting the potential for indigenous firms to enhance production capabilities and maximise the value of these assets.

As Nigeria continues to grapple with the evolving dynamics of the global energy sector, the NUPRC’s efforts to ensure a smooth transition and protect jobs within the industry will be closely watched. With the divestment of IOCs presenting both challenges and opportunities, the focus will be on how effectively the regulatory framework can support the growth of indigenous operators while maintaining the country’s position as a key player in the global oil market.

Komolafe’s assurances at the Energy and Labour Summit underscore a broader strategy by the NUPRC to foster a resilient and sustainable oil sector in Nigeria, one that balances economic growth with the imperative of adapting to a rapidly changing energy landscape. The coming months will reveal how this strategy plays out in practice, particularly as indigenous firms take over assets from departing international players and the industry navigates the twin pressures of economic recovery and global energy transition.