Who benefits as Nigeria’s parliament wraps up petroleum industry bill?

Senate President Ahmed Lawan told an industry conference in Abuja this week (7 June) that the Petroleum Industry Bill (PIB) will be passed this month. Different versions of this bill have been put forward without enactment for nearly two decades. See – How to allocate resources: Nigeria’s petroleum industry bill splits stakeholders. In that time, majors such as Shell and ExxonMobil, now giving increasing attention to cleaner energy, have significantly retreated from Nigeria. In this context, here are four prominent local firms who could benefit from regulatory clarity and reforms being proposed in the latest PIB version.

1. Famfa

Famfa’s most prominent principal is Folorunso Alakija, and it is involved in the Agbami deep-water oilfield in OML127 alongside Chevron’s local subsidiary Star Deep. Agbami is one of Nigeria’s top oilfields, producing about 150,000 barrels per day.

Alakija was an associate of Maryam Babangida, wife to the country’s ex-military ruler Ibrahim Babangida (1985 to 1993). Her acquisition of Agbami is linked to that relationship, and the oilfield was the subject of a Supreme Court dispute between her and former president Olusegun Obasanjo – who claimed ownership while he was president (1999 to 2007).   

2. Heirs Holdings

In January this year, Heirs Holdings bought a 45% stake in OML 17 (capacity: 27,000bpd) from Shell, Total and ENI. This parent company is owned by Tony Elumelu. His brother Ndudi Elumelu is a People’s Democratic Party (PDP) politician and the current minority leader of the House of Representatives.

Tony Elumelu’s Transcorp Power was among local firms that acquired assets in the Power Holding Company of Nigeria (PHCN) when it was privatised in 2013. There are accusations that the assets were privatised without due process, and the All Progressives Congress (APC) government has proposed to review those deals since winning power from PDP in 2015.

3. FIRST E & P

FIRST was founded in 2011 by Henry Ajumogobia, who had been the deputy petroleum minister during a PDP government between 2007 and 2009. It stepped into OML 83 and OML 85 when Chevron was divesting its 40% stake in 2015, and production began there in October 2020. Now, it is also in partnership with Dangote Group for the East-West Offshore Gas Gathering System (EWOGGS), which is an undersea pipeline system to deliver natural gas from the Niger Delta to the Lekki Free Trade Zone in Lagos.

4. Seplat

Seplat already supplies gas to power plants that account for about 30% of the country’s output. Alongside the state-owned Nigerian National Petroleum Corporation (NNPC), it is also presently proposing to construct the Assa North-Ohaji South (ANOH) gas plant.

ANOH is one of seven projects the government has determined to be strategic for expanding the country’s gas production, and it will have the capacity to produce 300 million standard cubic feet of gas per day when it is completed in 2022.

Seplat was cofounded by Bryant Orjiako. He is named in Italian court documents about an illicit deal for OPL245 involving the Nigerian government, Shell, Eni and an ex-petroleum minister Dan Etete (1995 to 1998). Orjiako is said to have acted as an adviser to Shell in that deal.[1]

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[1] Ordinary Court of Milan (2016). Public Prosecutor’s Report. Proc. 54772/13 R.G.N.R – NB in Italian.

Image credit: Johan Don-Daniel