Key questions this article answers:

  1. Has anything changed in the oil sector since President Tinubu resumed office?
  2. What is the outlook for the onshore oil industry as local companies acquire assets from international oil companies (IOCs)?

On Monday, Oando announced that the company had agreed with Eni to acquire 100% of Nigerian Agip Oil Company’s (Agip) shares. Two days later, the NNPC wrote a letter to Eni stating some reservations about the agreement, particularly on Eni’s failure to obtain the NNPC’s authorisation.

If you’ve followed the Nigerian oil and gas sector in the past year, you will recognise this as the NNPC’s modus operandi regarding divestment announcements. Last year, the NNPC went as far as getting a court injunction to block Seplat’s acquisition of ExxonMobil’s onshore Nigerian oil company, MPNU.

On the one hand, the NNPC should be informed of any asset sales as a party to the joint venture agreements with these companies. But, IOCs have maintained that share sales are not the same as asset sales. Still, these objections by the NNPC have been regarded as a stumbling block to the oil and gas industry as they increase investor uncertainty.

However, some things are different now, but the more things change, the more they stay the same. We’ll explore the differences and similarities between the oil sector in 2022 and 2023 and then provide an outlook for Nigeria’s onshore oil sector in the near term.