Pipeline sale controversy deepens as expert warns of investor confidence risks

Fresh controversy has erupted over efforts to revive the sale of a 40 percent stake in the Amukpe–Escravos Pipeline, with a governance expert warning that any attempt to resurrect a previously terminated transaction could damage investor confidence and raise fresh questions about transparency in Nigeria’s oil and gas sector.

In an interview with a local television, Jide Olatuyi, Managing Director of Policy Management Consult Services, said concerns surrounding the transaction extend beyond commercial interests and strike at the heart of governance, transparency, and the credibility of Nigeria’s investment environment.

“The contract was terminated,” Olatuyi said. “What stakeholders are saying is that there is a need for a new competitive bidding process rather than attempting to revive a failed transaction.”

The controversy has intensified amid scrutiny of the asset’s valuation. The earlier transaction involving the 40 percent stake was priced at approximately $243 million before collapsing over unmet contractual obligations. Independent assessments conducted in 2025 reportedly valued the same stake at between $544 million and $641 million.

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The significant disparity between the earlier transaction price and the more recent valuations has fuelled calls for a fresh competitive bidding exercise to ensure that the asset reflects prevailing market conditions and delivers maximum value.

Rejecting suggestions that opposition to the proposed transaction is driven by sentiment or commercial rivalry, Olatuyi insisted that the debate centres on governance standards within the petroleum industry.

“I don’t think it is about sentiment at all,” he said. “It is about governance in the oil and gas sector.”

According to him, Nigeria’s challenge is no longer limited to attracting investors but also ensuring that investors have confidence in the integrity of the country’s commercial and regulatory processes.

“If you are not committed to transparency, it becomes a problem for investors,” he said. “If you cannot build trust and confidence in the sector, capital will go elsewhere.”

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Olatuyi said several stakeholders, including project lenders such as Sterling Bank and AMCON, have advocated a transparent process that reflects current market realities and updated asset valuations.

The Amukpe–Escravos Pipeline, which has a transportation capacity of about 160,000 barrels per day and has maintained uptime above 95 percent, remains one of Nigeria’s most strategic crude evacuation assets. The pipeline plays a critical role in transporting crude from inland production fields to export terminals in the Niger Delta.

Officials of the Nigerian Upstream Petroleum Regulatory Commission and members of the technical committee that supervised the original transaction did not respond to requests for comment as of press time.

Olatuyi urged authorities to ensure that any future transaction involving the asset is conducted through an open, transparent, and competitive process capable of inspiring investor confidence and safeguarding public value.

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The debate comes at a time when the Federal Government is seeking to attract substantial investment into the energy sector and expand critical oil and gas infrastructure.

The eventual outcome of the Amukpe–Escravos Pipeline transaction could serve as a major test of Nigeria’s commitment to transparency, valuation discipline, and investor protection. As global competition for energy capital intensifies, governance standards may prove just as important as resource endowment in determining where investment flows.