Oil asset divestment guidelines inadequate, advocacy group insists
A Necological and fiscal advocacy group, Policy Alert, has condemned the guidelines provided by the Nigeria Upstream Petroleum Regulatory Commission ( NUPRC) on asset divestment in the oil and gas industry, saying the guide is “grossly inadequate” and “a tacit approval of the deals”.
Executive Director of the group, Tijah Bolton- Akpan, in a statement, said though the NUPRC deserves commendation, the guidelines may not achieve projected gain.
Shell, Eni and Exxonmobil have over $ 4.5 billion worth of assets on the divestment list but there has been an uprising especially against Shell as the NUPRC had earlier stated that Exxonmobil was yet to meet needed guidelines.
Bolton- Akpan said the capacity requirements in the due diligence request list of NUPRC focus mainly on current operational and financial competencies with little attention paid to the respective obligation and capabilities of divesting and successor entities to address residual issues, especially in the area of community rights, ecological restoration, decommissioning and abandonment.
Describing it as a mere fulfillment of all righteousness and even tacit approval of the deals, Bolton- Akpan said: “We are also of the view that since these guidelines are coming rather late in the day considering that several divestment deals have already been completed over the last decade, they must have some retroactive bite. The type of guidelines we need at this time should be such that not only provide a guide for current and future divestment but can also be relied on to revisit past deals and ensure that they had complied with the best global practices.
“Having waited this long for the country’s upstream oil regulator to intervene in the commotion that has greeted divestment deals in the sector in the past few years, the least we expected was a document that would address many of the very touchy legacy concerns in a far- reaching manner. We therefore reiterate our call for a moratorium on all divestment until a comprehensive regulatory framework that addresses these concerns is provided. To this end, urge the regulator to adopt the civil society- driven National Principles on Responsible Petroleum Industry Divestment as minimum criteria for assessing the alignment of previous and current divestment deals with the national interest.”
The organisation noted that Shell and other international oil companies ( IOCS) were offloading their so- called “high- risk” assets to domestic oil companies ( DOCS) with limited technical and financial abilities to manage such complex operations, adding that this was an indication that they are in a hurry to transfer responsibility for the massive decommissioning and abandonment bill on their hands and to evade accountability for historical atrocities against the communities where they operate. “We call on President Bola Tinubu to delay the Minister’s Consent to the Assignment of Interest until substantive issues are addressed. Granting such consent amid the current regulatory void would, in effect, amount to the Nigerian state offering the companies a getaway vehicle from the crime scene which their operations have turned the Niger Delta into,” the statement said.