Oil Assets Divestment: NUPRC Guidelines Inadequate, Says Policy Alert
By Stephanie Odiase
The oil asset divestment guideline provided by the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) have been described as “grossly inadequate” by a civil society organisation, Policy Alert.
The non-profit organization which works to promote fiscal and ecological justice in the Niger Delta, further described the efforts of the NUPRC to provide guidelines for asset divestment in the oil and gas industry in Nigeria as “a tacit approval of the deals.”
While commending NUPRC for finally heeding calls to intervene in the regulatory uncertainty surrounding the recent wave of divestment in the sector, the Executive Director of Policy Alert, Tijah Bolton-Akpan, stressed the organization’s position is that the released framework remains grossly inadequate and amounts to an approval in disguise of poorly arranged divestment deals.
In a statement made available to Extractive360, Bolton-Apkan said, “The capacity requirements in the due diligence request list appear to 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, and decommissioning and abandonment. This comes across as merely fulfilling all righteousness and even a tacit approval of the deals.”
He added: “We are also of the view that since these guidelines are coming rather late in the day considering that a number of 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.
Policy Alert noted that 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 expected was a document that would address many of the very touchy legacy concerns in a far-reaching manner.
He reiterated the call for a moratorium on all divestment until a comprehensive regulatory framework that addresses the concerns is provided.
To this end, the organization urged 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 further observed 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. It added 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 damage 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 added.
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