Nigeria’s Oil Sector Divestment Deals Face Prolonged Delays Amid Regulatory Concerns

In recent years, international oil companies (IOCs) have been divesting from Nigeria’s oil sector, particularly in the onshore and shallow water assets.

However, these divestment deals have faced prolonged delays due to regulatory concerns, causing worry among industry stakeholders.

At the Nigeria International Energy Summit (NIES) in Abuja, representatives from both IOCs and indigenous counterparts expressed their concerns about the slow progress of these deals.

The Nigerian National Petroleum Company Limited (NNPC) has been at the center of the discussions, with some accusing it of hindering the process.

In response, NNPC Group Chief Executive Officer, Mele Kyari, emphasized that the company’s role is to facilitate the process, not to obstruct it.

He explained that NNPC is responsible for ensuring optimal and sustainable production from the divested assets to guarantee energy security for the benefit of Nigerians.

Among the pending divestment processes are the ones involving Exxon Mobil Corporation, which agreed to sell its shallow-water oil assets to Seplat Energy Plc almost two years ago.

The Nigerian government has raised objections to the deal, citing its right of first refusal.

Similar issues have arisen with Eni’s plan to sell some of its assets to Oando, and Shell Plc’s agreement to sell its Nigerian onshore oil business to a group of local companies for over $1.3 billion.

These deals are also awaiting regulatory approval.

The delays in the divestment process have caused uncertainty for the communities and contractors that depend on these operations.

Industry leaders have called for the prompt intervention of the government to untangle all issues and diligently fast-track all relevant approvals.

In other news, OPEC+ members have agreed to extend voluntary first-quarter oil output cuts into the second quarter, sources said.

This move aims to support the market amid rising output from the United States and other non-member producers and concerns over demand as major economies grapple with high interest rates.

The oil sector in Nigeria is at a crucial point, with the need for regulatory clarity and swift action to ensure that the divestment deals are completed, and the industry can move forward with confidence.