27 March 2015, Lagos – The local content policy of the Federal Government received a boost Wednesday with the formal handing over of Shell’s equity in OML 29 to a local oil and gas firm, Aiteo, thereby increasing the participation of indigenous companies in the upstream sub-sector of the oil and gas industry.
Speaking at a brief ceremony to mark the signing of a Memorandum of Understanding (MoU) between Shell Petroleum Development Company (SPDC) and Aiteo for the transfer of Shell’s equity in OML 29 to the latter, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Joseph T. Dawha, described the event as a milestone in the quest of the Federal Government to develop the capacity of Nigerians and Nigerian companies to play leading roles in every sector of the oil and gas industry as encapsulated in the Nigerian Content Development Act.
Also speaking in a similar vein, the Managing Director of SPDC and Country Chair of Shell Companies in Nigeria, Mr. Osagie Okunbor, described the event as a major step towards the fulfillment of “the nation’s aspiration of growing indigenous participation in the upstream sector of the oil and gas industry”.
He described OML 29 as one of the biggest onshore oil blocks that Shell has ever divested in the country.
“One of the key reasons we are divesting some of our assets in the country is to grow indigenous participation in the industry. With the divestment of OML 29, one of our biggest blocks to Aiteo, the local content development in the country has received a major boost,” Okunbor said.
The Shell boss who put the value of the oil bock at $2.56 billion also disclosed that it has an average production capacity of 43, 000 barrels per day with a potential to grow beyond its current capacity in the nearest feature.
In his remarks, the Chairman of Aiteo Group, Mr. Benedict Peters described the ceremony as a significant landmark that will help the company achieve its aspiration of participating in the entire value chains of the oil and gas industry.
“To us in Aiteo, this event brings a capping to our aspirations, visions and our dreams. It has also brought tremendous value to our balance sheet. The reality of the asset is that it is the largest on-shore assets that Shell has ever divested,” he stated.
He expressed optimism that with the acquisition, the company will add significant value to the oil and gas industry and the nation’s economy, adding that “The Local Content Act made us who we are today, without it companies like us will never have made it to this particular level”.
He expressed gratitude to the Federal Government for providing the enabling environment for indigenous companies to compete and grow in the oil and gas industry through the Local Content Act.
“We thank the President and the Minister of Petroleum Resources who have driven the local content policy that has given birth to the Nigeria of our dream,” Peters said.
The event was witnessed by the Group Managing Director of the NNPC, Dr. Joseph Thlama Dawha and other members of Top Management of the Corporation.
NNPC is the senior partner in the OML 29 Joint Venture. Other partners include Total and Agip.