Nigeria Suffers $21bn Loss to Oil, Gas Divestment

The Nigeria oil and gas sector in Nigeria has recorded $21 billion worth of assets divested, putting its future in jeopardy, according to a statement by Oilprice.

Oilprice stated that the oil and gas production in Nigeria has been severely impacted by the Western ESG strategies that are forcing foreign oil majors to reconsider their upstream and downstream operations worldwide, resulting in significant reshuffling and divestments of assets. 

In contrast to Western NGO’s strategies, NGOs in Nigeria, such as “We, the People,” are calling for a government moratorium to prevent further divestments in the Niger Delta. The NGO is concerned that if oil companies are allowed to divest without cleaning up the entire Niger Delta region, the environmental issues in the area will never be addressed. 

NJ Ayuk, Executive Chairman of Africa Energy Chamber, believes that the continent needs to leverage its immediate resources to eliminate energy poverty, as Africa is a gas continent.

According to the Nigerian Upstream Petroleum Regulatory Commission, the main reasons for the divestments are regulatory uncertainty in Nigeria’s oil and gas sector prior to the enactment of the Petroleum Industry Act 2021 and ESG-related fossil fuel divestment schemes forced by energy transition and COVID-19.

Over an eight-year period, Nigeria’s annual capital expenditure in the upstream arm of the oil sector fell by more than 70 percent. The country’s total annual upstream capital expenditure decreased by 74 percent from $27 billion in 2014 to less than $6 billion in 2022, owing to competition from regional peers, and Nigeria’s share of total upstream investment has decreased.

However, there is still hope because Nigeria’s natural gas and oil reserves are increasing in the short term. According to the NUPRC, Nigeria’s oil and condensate reserves total 31.060 billion barrels for oil and 5.906 billion barrels for condensate.

There are 102.32 trillion cubic feet of associated gas reserves and 106.51 trillion cubic feet of non-associated gas reserves.

The future of Nigeria and Sub-Saharan Africa is at stake, and a growing number of Southern leaders and analysts believe that it is past time to rethink the North’s strategies and policies. Western climate change and IPCC/IEA reports are pushing divestment strategies that are not only controversial but also counterproductive for most developing countries.