PREVIEW
As multinationals retreat from the continent, Tinubu seems keen to offer incentives to domestic firms to take over their assets
Nigeria's state petroleum authority has made an unusual offer to the oil and gas giants who now want to sell up their assets in Nigeria: quick approval for the divestment plans will be conditional on the majors taking responsibility for the costs of environmental damage.
Following a meeting with a group of companies including Exxon Mobil and Shell in Abuja last week, Nigerian Upstream Petroleum Regulatory Commission (NUPRC) chief Gbenga Komolafe said that approval could be granted in June if the companies commit to cleaning up spills and compensating communities rather than wait for authorities to apportion blame.
The alternative, he warned, is to wait for the NUPRC to identify and assign all liabilities, potentially delaying the final approval until August.
Nigeria is witnessing an exodus of oil majors from their onshore investments, led by Shell, Total, Eni and Norway's Equinor (AC Vol 65 No 3, Shell leads oil majors' exit from the Niger Delta). President Bola Tinubu's government appears keen to offer incentives to domestic oil and gas firms to take over their assets.
Shell, the largest major player in Nigeria, announced plans earlier this year to sell its Nigerian subsidiary to Renaissance, a consortium of five mainly local firms, as part of a transition away from fossil fuels, it says.
However, environmental and human rights activists are urging the Nigerian government to withhold approval of the divestment plans, unless the oil giant does more to tackle pollution in the region caused by its activities. Last year, a report commissioned by Bayelsa State in the Niger Delta, estimated that US$12 billion would be needed to pay for over a decade of damage caused by Shell and Eni (AC Vol 64 No 11, Bayelsa commission reports).
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