Kyari: IOCs divesting from Nigeria because of net-zero commitments

Mele Kyari, group managing director, Nigerian National Petroleum Company (NNPC) Limited, says international oil companies (IOCs) are not withdrawing investments from Nigeria’s oil industry because of a lack of opportunities.

Kyari said they are divesting to meet net-zero commitment as well as shifts in their investment portfolios.

The NNPC GMD said this on Monday while delivering his welcome speech at the 2022 Nigerian International Energy Summit (NIES2022) held in Abuja.

Net-zero refers to the reduction of greenhouse gases produced to achieve carbon neutrality.

Last week, Seplat Energy Plc announced that it had signed an agreement to acquire the entire share capital of Mobil Producing Nigeria Unlimited (MPNU) from Exxon Mobil Corporation, Delaware (ExxonMobil).

Similarly, Royal Dutch Shell had said it was discussing with the federal government to sell its onshore oil assets in Nigeria.

Despite the net-zero initiative, data from ShareAction shows big banks are still pumping billions of dollars into the new oil and gas sector. 

“Companies are divesting. They are leaving our country. Literally, that is the best way to put it,” he said.

“They are not leaving because opportunities are not here but because companies are shifting their portfolios where they can add value and not just that — but where they can also add to the journey towards carbon net-zero commitment.”

Kyari said that energy transition must ensure energy justice and take into cognisance the unique needs of developing countries like Nigeria.

“It is my single honour to say that transition must have sanity, and there must be justice in energy transition,” he added.

“That justice means that it helps us to get to a point where we are able to transport our ordinary people from their homes to their workplaces in the short term.

“And ultimately also assists in making sure that we have the most friendly fuel that is put in place in the next five to ten years, ultimately as we also build our ability to put the renewables on the table — and even that we can’t do without financing — and we also know that there is a shortage of financing in this respect.

“Therefore, for us in NNPC, we are here to serve you. We are here to facilitate this process. We will work with our partners, and of course, you are seeing some of the consequences.”

He added that despite issues in the oil sector, divestment must come with a smooth decommissioning process.

“We will work with our partners. We understand the necessity for divestment. We do know that there are issues. We understand that this must take place but also that it must be done in such a way that we are able to deal with issues around decommissioning and also make sure that whatever arrangement that is put in place ensures that we are also aligned along the energy transition journey that we are going to,” Kyari said.

On the other hand, he said the effect of energy supply can be seen in Nigeria today.

“A minor disruption in supply can cause the chaos that you are seeing today on our streets, and that means that those redundancies must be settled,” he said.

“As a country, we must address the issue of local production of our various petroleum products even in the short-term, and this is what we are doing.”