Royal Dutch Oil Giant Shell has said that though it has divested some of its assets in Nigeria, but it does not signify that the company is exiting.
Speaking at the Nigeria Oil and Gas Summit in Abuja, managing director, Shell Petroleum Development Company (SPDC) and Country Chair, Shell Companies in Nigeria, Mr. Osagie Okunbor said, “we has a long term commitment in Nigeria, though we have divested some of our assets but if the environment is good, we will make more commitment.
We have the commitment to grow internal resources and indigenous companies to come into business so that we can maintain a long term presence”.
He further said that since the company is in joint venture (JV) with the government,there is the need to have collaborative shared vision on ways of going about investment decisions.
Okunbor also noted that with low oil prices and the uncertainties around the industry, there is the need for all stakeholders to work together.
“We really need to come together and agree on the priorities we have. We all have a programme that we have agreed for 201; most of that essentially started before this radical drop in prices. So both sides need to come together such that we don’t get into the business of stopping projects half-way and we end up incurring more cost.
Meanwhile, Mr Markus Droll, Vice President, Nigeria and Garbon, Shell Upstream International at the occassion said that the low price of crude oil at the international market has serious implications for exporting countries, including Nigeria.
Droll said that the low oil price has affected the financial position of lran, Russian, Venezuela and Nigeria, adding that no country can predict what will happen for the rest of the years.
According to him, it is clear that we need to be prepared to deal with volatility in 2015, and beyond. While for the longer term, the fundermental drives of oil market, such as rising demand and the need for new supplies remain the same.
If you take into account the need to compensate for decline rates of at least per cent a year which requires massive effort.
The global oil market today is very volatile, after four years of relative oil price stability at around 110 dollars per barrel, between mid-2014 and January 2015″.
He said that the oil companies still need more effective counter-strategy against oil theft and sabotage, adding the oil companies has directed more resources to try to counter the menace which has become a bigger problem compared to a year ago.
According to him, we still need better funding for capital projects and to clear pending payments on expenditure.
We are very concerned about what impact the much lower oil price will have on 2015 funding. We still need more predictability around leases, if we increase certainty around leases, then investment becomes easier to attract.
Droll said that in despite of the challenges, Nigeria could develop into a major energy consumer, adding that Shell is well placed to support Nigeria in all places of its journey to transforming the energy sector.
He said that to overcome the obstacle, Nigeria needs better security, more effective strategy to combat oil theft, enhance funding for capital projects, and promotes fiscal stability
The company has also completed the assignment of its 30 percent interest in oil mining lease (OML) 18 and related facilities in the Eastern Niger Delta.
Its interests in OML18 were assigned to Eroton Exploration & Production Company Limited. Total cash proceeds for Shell amount to $737 million.
This divestment is part of the strategic review of SPDC’s onshore portfolio and is in line with the Federal Government of Nigeria’s aim of developing Nigerian companies in the country’s upstream oil and gas business.
The company said it had been in Nigeria for more than 50 years and remains committed to keeping a long-term presence there – both onshore and offshore.
Through SPDC and its other Nigerian companies, Shell responsibly produces the oil and gas needed to help fuel the economic and industrial growth that generates wealth for the nation and jobs for Nigerians, read a statement.
OML18 covers an area of 1,035 square kilometres and includes the Alakiri, Cawthorne Channel, Krakama, and Buguma Creek fields and related facilities.
The divested infrastructure includes flow stations together with associated gas infrastructure plus oil and gas pipelines within the OML.
The divested fields produced on average around 14 000 barrels of oil equivalent per day during 2014.