When international oil companies began signalling their intention to exit onshore and shallow-water assets in Nigeria, alarm bells rang across the sector. Critics warned of production declines, environmental degradation, and a loss of technical expertise that would cripple the industry. The doomsayers predicted catastrophe.
President Bola Ahmed Tinubu saw something different. He saw an opportunity to restructure Nigeria’s upstream sector around capable indigenous operators who would bring new energy, new capital, and new commitment to assets that international companies had increasingly treated as non-core.
The President accelerated ministerial consents for four major divestments: Renaissance acquiring Shell’s onshore assets, Seplat acquiring ExxonMobil’s assets, Oando acquiring Agip’s assets, and Chappal acquiring Equinor’s assets. Each transaction was structured to ensure that technical capability, financial capacity, and environmental responsibility would be maintained or improved.
“Through targeted Presidential directives and sustained implementation, fiscal terms were recalibrated, regulatory clarity strengthened, and long-standing bottlenecks addressed,” Olu Arowolo Verheijen, special adviser on Energy to President Bola Ahmed Tinubu, said. She explained that “Contracting timelines were compressed, cost structures improved, and investor confidence rebuilt.”
The Results Speak for Themselves
The doomsayers were wrong. Far from declining, onshore production has reached its highest level in twenty years. The indigenous operators who acquired assets previously held by international companies have brought focus, efficiency, and commitment to fields that were underperforming under previous ownership.
Between 2023 and 2026, total oil production increased by 400,000 barrels per day, reaching 1.6 million barrels per day. The gains came disproportionately from onshore and shallow-water assets—precisely the assets that international companies had been accused of neglecting.
“A deliberate programme of divestments has enabled the transfer of onshore and shallow-water assets to capable indigenous independents—unlocking record growth in onshore production and creating a more balanced, performance-driven asset ownership structure across the sector,” Verheijen stated.
Security Directives That Enabled Production
The divestments alone would not have been sufficient without a parallel effort to address the security challenges that had plagued onshore production. The administration deployed targeted security directives, creating an operator-led, data-driven framework with government support coordinated by the National Security Adviser.
The results have been dramatic. Disruptions to production have declined significantly. Assets that were previously shut in due to security concerns have been brought back online. And the indigenous operators who acquired those assets have been able to operate without the security challenges that had driven their international predecessors to exit.
“Deploy targeted Security Directives—operator-led, data-driven government support coordinated by the NSA,” Verheijen listed as a core element of the administration’s restoration strategy. “Close outstanding divestments to unlock near-term production growth from onshore assets.”
The Refining Revolution
The divestment programme has been accompanied by a dramatic expansion of domestic refining capacity. The administration’s Naira-for-Crude policy and market-based supply frameworks have enabled private sector-led local refining at scale. The results are visible in production numbers: automotive gas oil production increased from 1.16 million litres per day in 2023 to substantially higher levels by 2026, while Premium Motor Spirit production ramped up through the rehabilitation of domestic refineries.
Perhaps most visibly to ordinary Nigerians, petrol queues—once a permanent feature of the landscape—have been absent for three years. The combination of deregulated pricing, private sector-led refining, and market-based supply has ended the periodic shortages that plagued the country for decades.
“Deregulate PMS pricing to end regressive subsidy burdens and free public resources,” Verheijen noted as a core conservative objective. “Enable private sector-led local refining at scale through the Naira-for-Crude policy and market-based supply frameworks.”
A More Balanced Sector
The cumulative effect of the administration’s upstream, midstream, and downstream policies has been a more balanced and resilient energy sector. International oil companies remain active in deepwater and integrated gas projects—their natural areas of competitive advantage. Indigenous operators have taken ownership of onshore and shallow-water assets, bringing new focus and efficiency. And domestic refining capacity is growing, reducing Nigeria’s exposure to volatile international markets.
“This is not an end point, but a foundation,” Verheijen said. “The task ahead is to consolidate these gains, deepen market discipline, and scale investment. Our objective remains clear: to ensure that Nigeria’s energy sector fully serves its highest purpose—powering economic opportunity, driving industrial growth, and improving the lives of all Nigerians.”
The divestment that was supposed to be a disaster has become a success story. And the indigenous operators who stepped forward to acquire assets that international companies abandoned are proving that Nigerian companies can compete with any in the world.
. Alli is an Abuja-based public affairs analyst
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