The Senate has set in motion the machinery to probe the implementation or lack thereof of the Petroleum Industry Act (PIA), as well as the possible exit of some international oil companies especially ExxonMobile from Nigeria.
This sequel to the adoption and debate of a motion titled: “Urgent Need for Enquiry into Implementation of the Petroleum Industry Act (PIA) 2021 with Regards to Potential Exit of International Oil Companies (IOCS) from Nigeria: Case of ExxonMobil in Akwa Ibom State”, sponsored by Senator Etim Bassey Aniekan (PDP, Akwa-Ibom North East), during Thursday’s plenary.
In his motion, Senator Aneiken noted that the discovery of oil and gas in commercial quantity in Nigeria attracted International Oil Companies (IOCs) such as Shell PB, Mobil Producing Nigeria Unlimited (later merged into ExxonMobil), Nigerian Agip Oil Company (NAOC), to name but a few in Nigeria for purpose of further exploration, development and production in the sector.
He further noted that the IOCs went into Joint Venture (JV) contracts with the Federal Government through the NNPC (Now NNPC Ltd), particularly, in the case in point, the NNPC holds 60 per cent while ExxonMobil holds 40 per cent shares in the JV between the NNPC and ExxonMobil.
The federal lawmaker said that ExxonMobil offered to sell its entire onshore and shallow water facilities and business in Akwa Ibom State preparatory to its exit from its onshore and shallow water operations to focus on deepwater production.
According to him, the Nigerian National Petroleum Company Limited has the Right of First Refusal (RFR) and has notified ExxonMobil of its intention to exercise that Right of Preemption on ExxonMobil’s planned sale of its entire asset in Nigeria’s onshore and shallow waters but ExxonMobil proceeded to seal a deal with Seplat Energy Plc for that purpose.
He observed that the Petroleum Industry Act (PIA) 2021, was enacted to provide legal governance, regulatory and fiscal framework for the Nigerian Petroleum Industry as well as address the multifarious challenges in the sector which is still the main stay of the country’s economic life.
According to him, the PIA has not made clear implementation plans for situations such as the now emerging trend of exit of the IOCs and has not holistically resolved issues bothering on protection of interest of the Federal Government, producing states, host communities or provided future assurances in the handling of situations such as the issue now in focus.
The Senator noted that similar sudden withdrawal of Shell from Warri in Delta State left a void in terms of employment opportunities, infrastructural development, and economic support and has generated other profound negative implications for the local communities, and across the footprint of surrounding towns and cities.
Senator Aneiken further stated that the development resulted in myriad of societal crises, and security challenges and now reducing the centers of activities into ghost towns and cities.
He expressed concerns about the potential adverse effects of the exit of ExxonMobil from Akwa Ibom State including high loss of jobs, exit of professionals and service companies from Akwa Ibom, loss of revenue as well as abandonment of certain yet-to-be-satisfied obligations.
He also noted that the new company taking over the assets and liabilities of ExxonMobil may not have the requisite capacity to successfully step into ExxonMobil’s footprints and/ or muscle the pending obligations hitherto managed by ExxonMobil in the oil-producing states and host communities.
Aneiken also said, “For instance, where clean-up is required or where capital-intensive corporate responsibilities were commenced.
“The need to get involved in the processes regarding the exit of ExxonMobil in Akwa Ibom State cannot be left in the hands of the NNPC and other regulators alone but there is real need to involve all stakeholders for the purpose of mapping, profiling, marking up, inventorizing and analyzing what ExxonMobil was doing in the oil producing states and host communities with a bid to obtaining clear undertaking that whoever takes over ExxonMobil would, in the interest of the state and her people, also take over all or a reasonable volume of those responsibilities previously undertaken by ExxonMobil.
“The PIA implementation has not yet produced any workable coordination or clearing house by which NNPCL, regulators and oil producing companies, work and coordinate vital petroleum sector changes with significance consequences, with the to-be-impacted host communities, cities and states.”