Nigeria Advances Restart of Oil Operations in Ogoniland After Shell Exit

In a bold move aimed at reviving crude oil output and regaining investor confidence, the Nigerian government has launched a strategic plan to restart oil production across parts of the Niger Delta—an oil-rich yet conflict-prone region. This initiative follows Shell’s divestment of several onshore assets in the area, marking a new chapter in the ownership and management of Nigeria’s petroleum resources.

The Shell Petroleum Development Company (SPDC), after years of operational difficulty in the region due to oil theft, community unrest, and aging infrastructure, recently sold a significant portion of its onshore portfolio. With the departure of Shell, Nigeria now turns to a combination of local oil firms and public-private collaboration to maintain production levels and unlock new revenue streams.

Why Shell Pulled Out of the Niger Delta

Shell, like several other international oil companies (IOCs), has faced persistent operational challenges in Nigeria’s onshore oil sector. Chief among them are sabotage, illegal refining, pipeline vandalism, and frequent litigation from local communities. These challenges led to a significant drop in Shell’s output over the years.

By selling off its onshore assets, Shell aims to reduce its exposure to these risks and focus more on offshore and gas projects. The exit, however, has left a vacuum in one of Nigeria’s most critical economic zones, where oil contributes about 90% of export revenues and 60% of government earnings.

Local Players Step Up

To prevent a major decline in output and jobs, Nigeria is now shifting its focus to indigenous companies like Seplat Energy, Heirs Energies, and others who are acquiring the assets sold by Shell. These companies are expected to bring a new model of community engagement, local understanding, and operational flexibility that IOCs often lacked.

Unlike Shell, these Nigerian operators may be better positioned to manage host-community relations. Some have even pledged to invest in infrastructure, education, and health projects for local residents, in a bid to win hearts and maintain operational stability.

Security Remains a Stumbling Block

Despite the optimism surrounding the new ownership structure, the region still poses serious security risks. The Niger Delta remains volatile, plagued by militant groups and oil bunkering cartels that continue to siphon crude from pipelines. This insecurity undermines production targets and scares away potential investors.

To address this, the Nigerian government has reportedly deployed joint military task forces and enhanced surveillance systems in collaboration with local oil companies. Satellite imagery, drone patrols, and community policing are now part of a larger blueprint to restore security in the region.

Production Goals and Economic Implications

Nigeria’s current oil production fluctuates around 1.3 to 1.5 million barrels per day—well below the OPEC quota of 1.8 million. With oil prices stabilizing and demand gradually recovering, the government aims to ramp up output to above 1.8 million barrels per day by early 2026.

Reopening fields previously shut down due to Shell’s challenges is key to hitting this target. The revenue potential is significant: every additional 100,000 barrels per day could inject over $2 billion annually into the economy at current prices.

This could help Nigeria stabilize its exchange rate, curb inflation, and boost infrastructure spending—all crucial in the run-up to the 2027 elections.

Environmental and Community Considerations

However, critics warn that reopening oil fields must not come at the expense of environmental sustainability. The Niger Delta has long suffered from oil spills, gas flaring, and land degradation, with little remediation by former operators.

The new generation of Nigerian firms faces mounting pressure to adopt cleaner practices and prioritize environmental restoration. The government has emphasized this by requiring new license holders to submit Environmental Impact Assessments (EIAs) and community development plans before commencing operations.

In recent months, organizations like the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) have also signaled stricter monitoring to ensure operators remain compliant with ESG (Environmental, Social, Governance) standards.

Global Context: A Turning Point for Africa’s Oil Industry?

Nigeria’s pivot to local companies mirrors a larger trend across Africa, where countries are seeking to reclaim control over natural resources long dominated by foreign interests. From Ghana to Angola, governments are increasingly placing assets in the hands of domestic operators, banking on their local roots and commitment.

This transition also reflects growing concern over energy security in a world grappling with climate change, geopolitical realignments, and declining Western investment in fossil fuels. As major oil companies shift to renewables, developing nations like Nigeria are caught between maximizing their existing oil wealth and planning for a low-carbon future.

Conclusion: Opportunity Amid Uncertainty

Nigeria’s push to restart oil production in the Niger Delta—after Shell’s exit—is both a challenge and an opportunity. The initiative could empower local businesses, generate billions in revenue, and reduce foreign dependency. But its success hinges on how well Nigeria tackles security risks, enforces environmental laws, and ensures fair community participation.

If the country gets it right, this could mark a new era of energy independence and inclusive growth in the region. If not, the mistakes of the past may continue to haunt Nigeria’s oil-dependent economy.