Nigeria Approves Four Major Oil Divestments in Landmark Regulatory Shift
In a significant step toward reshaping Nigeria’s oil industry, the Federal Government, through the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), has approved four out of five major divestment requests from international oil companies (IOCs). This move signals a shift in the nation’s energy landscape, enabling new investment and operational changes in the sector.
Gbenga Komolafe, Chief Executive Officer of NUPRC, announced the approvals during the launch of the Project One Million Barrels Per Day initiative in Abuja. The event also marked three years since the establishment of the NUPRC, formed under the Petroleum Industry Act (PIA) 2021 to overhaul the regulatory framework governing Nigeria’s upstream oil sector.
Komolafe praised the strides made by the commission, stating that the PIA has allowed NUPRC to address legacy issues, streamline outdated regulations, and foster a more efficient exploration process despite global challenges, such as the energy transition and the push to defund fossil fuels.
“In the last three years, we have made significant strides towards attaining these goals despite the persistent challenges of the global push for energy transition,” said Komolafe. “Leveraging the PIA, we are addressing the legacy challenges of outdated regulatory processes, encumbrances to exploration.”
Komolafe revealed that of the five divestment applications received by the NUPRC, four were approved, while one — Shell’s sale of its assets to Renaissance Africa Energy Company Limited — failed to pass regulatory scrutiny. The four successful transactions include:
Mobil Producing Nigeria Unlimited’s divestment to SeplatEnergy Offshore Limited.
Equinor Nigeria Energy Company Limited’s transfer to Project Odinmin Investments Limited.
TotalEnergies EP Nigeria Limited’s sale to Telema Energies Nigeria Limited.
Nigerian Agip Oil Company Limited’s divestment to OandoPetroleum and Natural Gas Company Limited.
Komolafe emphasised that the divestments, made possible through the PIA, represent the first time such transfers have been managed in an orderly and transparent manner. The assets involved in these transfers include a substantial 6.73 billion barrels of crude oil and condensate, along with 56.27 trillion cubic feet of gas.
“The divestment of Shell Petroleum Development Company Limited’s assets to Renaissance Africa Energy Company Limited could not scale the regulatory test,” Komolafe noted, though he did not specify the exact reasons for the decision.
He added, “I believe it is a success for our industry and it will go a long way in facilitating the achievements we have made in the oil and gas industry.”
The NUPRC’s focus on boosting oil and gas reserves remains steadfast, with Komolafe outlining plans to grow reserves to 37.5 billion barrels of oil and 209.26 trillion cubic feet of gas through ongoing studies and developmental activities.
Meanwhile, the Nigerian National Petroleum Company Limited (NNPC) has announced efforts to replace ageing infrastructure that hampers the evacuation of crude oil. NNPC’s Group Chief Executive Officer, Mele Kyari, pointed to vandalism and oil theft as critical challenges facing the sector but reiterated the government’s commitment to modernising the country’s infrastructure.
“We are dealing with infrastructure that is over 50 years old,” Kyari said. “Without changing those pipelines, the government cannot evacuate the additional barrels that we are going to produce, particularly on the onshore assets.”
Kyari also praised the NUPRC’s regulatory oversight, stating, “We are proud to be regulated and obey all your rules, and we will see the results.”
As Nigeria seeks to increase its daily oil production and navigate the complexities of a transitioning global energy market, the approval of these divestments marks a pivotal moment for the country’s oil and gas sector. However, the stalled Shell transaction serves as a reminder that regulatory scrutiny remains high, even as the industry prepares for significant changes.
