Nigeria Prepares Massive Oil Asset Sale as International Companies Exit Onshore Operations

Nigeria’s oil and gas industry is bracing for a transformative wave of asset divestments as at least ten onshore and shallow-water oil blocks containing an estimated two billion barrels of oil equivalent prepare for potential sale, according to a new report by Renaissance Capital Africa.
International Oil Companies and the Nigerian National Petroleum Company Limited are preparing to offload mature onshore and swamp assets as they pivot toward offshore and deepwater operations, marking the third major phase of ownership change in Nigeria’s oil industry. The potential assets include blocks operated by Chevron, TotalEnergies, and NNPC’s exploration subsidiary NEPL, spread across the Niger Delta’s prolific terrain.
“Looking ahead, we anticipate further divestments by IOCs and NNPC JVs, where we see a significant opportunity for local E&P players to acquire 10 oil wells holding 2,008 mmboe,” Renaissance Capital stated, citing data from industry engagements. The blocks collectively contain 937 million barrels of oil reserves and 6.4 trillion cubic feet of gas, including OMLs 49, 50, 51, 55, 64/66, 65, 86/88, 100, 118, and 140.
Indigenous and regionally focused exploration and production companies have already made acquisitions worth over $7 billion in Nigeria since 2020, with firms such as Aradel Holdings, Seplat Energy, Heirs Holdings, and ND Western leading the charge. These local players are now deploying fresh capital into drilling, well re-entries, and field development programmes that could significantly expand their scale.
The shift to local ownership is already yielding results, with Renaissance Capital noting that “post the acquisition of these onshore assets, local vandalism and theft have reduced materially.” This comes after years of rampant oil theft that saw transmission losses from production stations to terminals reach up to 90 percent at their peak between 2020 and 2024.
The exodus of international operators stems from multiple factors including environmental, social and governance considerations, predetermined investment lifecycles, and challenging operating conditions. Many IOCs have committed to the World Bank’s Zero Routine Flaring Initiative and face stringent Securities and Exchange Commission reporting requirements that make mature oil and gas assets less attractive.
The 2021 Petroleum Industry Act has facilitated this transition by providing investors with free entry and exit provisions, replacing the bureaucratic delays that once hampered asset transfers. Recent major transactions, including the $2.4 billion sale of Shell Petroleum Development Company to the Renaissance Energy Group and Seplat’s $1.58 billion acquisition of Mobil Producing Nigeria Unlimited, have been structured as leveraged buyouts where oil produced serves as security for loans issued by sellers to buyers.
Financing capacity, historically a constraint for Nigerian independents, is evolving with refined funding structures and improved governance requirements. Enhanced due diligence now includes ESG action plans, proof of reputable off-takers, and monthly production reports to inform repayment capacity. Oil and gas-specific assets currently account for approximately 30 percent of the loan book for local commercial banks, a figure expected to grow following the new wave of divestments.
Nigeria’s oil production is gradually recovering from years of decline, with active rig counts climbing from 29 in January 2024 to 40 in September 2025, a level not seen in several years. The government aims to raise production above two million barrels per day by fiscal year 2026, supported by the PIA’s incentives and rising domestic participation. Offshore and deep offshore operations accounted for 55 percent of national production in 2024, compared with 45 percent from land and swamp terrains.
The report highlights the transformative impact of the 650,000-barrel-per-day Dangote Refinery as a structural inflection point for the midstream sector. The Domestic Crude Supply Obligation ensures a steady supply of local crude with a “no compliance, no exports” enforcement mechanism that the report describes as more than a policy aspiration but an operational requirement. The refinery is expected to improve Nigeria’s current account by $5.5 billion annually by keeping value-added operations onshore, according to IMF estimates.
Renaissance Capital projects the moves will consolidate Nigeria’s transition to a locally dominated onshore oil sector while international companies focus on lower-risk, capital-intensive deepwater assets. The NNPC, transformed into a commercial entity under the PIA, is expected to rationalize its portfolio ahead of a potential initial public offering, with medium-term focus on asset rationalization and governance.
Despite ongoing challenges, Renaissance Capital expressed cautious optimism about the outlook, stating that “sustained execution on these fronts could position Nigeria’s petroleum industry for a gradual but durable recovery in both output and value creation.”
Source: businessday.ng