Nigeria’s Local Firms Drive Historic Shift in Oil Ownership

In a dramatic evolution of Nigeria’s energy sector, local companies are increasingly taking over oil assets once dominated by international oil giants. This movement marks a historic shift in ownership of the country’s vast oil wealth, long controlled by foreign firms such as Shell, Chevron, ExxonMobil, and TotalEnergies.

For decades, Nigeria’s oil industry remained heavily reliant on multinational corporations to extract, process, and export its crude oil. However, a strategic transition has emerged, with Nigerian-owned firms purchasing high-value onshore and shallow water assets, primarily in the Niger Delta region. This shift is being driven by global divestment trends, evolving energy transition pressures, and a renewed emphasis on national economic empowerment.

Several Nigerian companies—such as Seplat Energy, Heirs Energies, and ND Western—have stepped up to acquire oil blocks and operations previously held by international oil companies (IOCs). These domestic firms are now asserting leadership roles in exploration, production, and resource control, redefining Nigeria’s position in global energy markets.

Why Global Oil Giants Are Pulling Back

The exit of major international firms from Nigeria’s onshore oil fields has been shaped by several converging factors. Environmental concerns, community tensions, oil theft, pipeline sabotage, and rising operational risks have prompted these companies to focus their attention offshore, where risks are generally lower and security challenges more manageable.

Furthermore, the global push toward cleaner energy sources has encouraged these oil giants to reevaluate their portfolios. In response, they have divested from mature or challenging assets in countries like Nigeria and reallocated investments into natural gas, renewables, and deepwater exploration.

Shell, for instance, has significantly scaled down its onshore operations, citing persistent environmental and security issues in the Niger Delta. ExxonMobil, too, has announced sales of select assets to Nigerian buyers as part of its global restructuring plan.

The Rise of Nigerian Energy Firms

In the wake of these divestments, local companies have swiftly moved to fill the gap. Many of them are led by ambitious Nigerian entrepreneurs and backed by domestic or pan-African investment firms.

Heirs Energies, led by businessman Tony Elumelu, recently acquired OML 17 from Shell and its partners in a landmark $1.1 billion deal. The acquisition not only increased Heirs’ production capacity but also showcased the financial and technical capabilities of Nigerian-owned energy enterprises.

Seplat Energy, another prominent local player, has consistently expanded its asset portfolio, demonstrating expertise in both upstream and midstream operations. The company recently secured regulatory approval for the purchase of ExxonMobil’s shallow water assets—though some government agencies have delayed final consent due to technical and legal complexities.

ND Western, which has partnered with several local entities, also acquired assets from Shell and others, and has grown into a significant producer in the industry.

These firms represent a new era of African entrepreneurship in the energy sector. Their ability to mobilize capital, attract local talent, and navigate complex operating environments is critical to sustaining Nigeria’s oil output amid global changes in energy demand.

Benefits for Nigeria’s Economy

This transformation brings immense potential for Nigeria’s economy. For years, much of the profit from the country’s oil industry flowed overseas through foreign ownership. Now, as local companies assume control, a larger share of revenue remains within Nigeria’s borders.

Domestic ownership can help:

• Increase local content and employment

• Strengthen the naira through reduced repatriation of profits

• Support domestic value chains and services

• Promote reinvestment in local communities

Moreover, indigenous companies are often more attuned to the socio-political dynamics of the Niger Delta and better positioned to engage with local communities. This can potentially reduce the frequency of disruptions due to militancy or oil theft and foster more sustainable development in the region.

The Risks and Challenges Ahead

Despite these opportunities, the transition is not without risks. Many of the indigenous firms face major hurdles in financing, environmental compliance, and operational efficiency.

Securing capital for large-scale acquisitions remains a challenge, especially in the face of high-interest rates, macroeconomic volatility, and regulatory delays. Additionally, many newly acquired assets come with environmental liabilities, including decades of spills, contamination, and legacy issues that require costly remediation.

There is also a concern about governance. Some analysts warn that without strong institutional oversight, the benefits of this oil wealth transfer may not reach the broader Nigerian population. Transparency, accountability, and adherence to the Petroleum Industry Act (PIA) will be critical to ensuring sustainable outcomes.

Historical Context: A Long Journey to Local Control

Nigeria’s push for local content and indigenous participation is not new. As far back as the 1970s and 1980s, the government implemented policies to increase national control over oil assets. The creation of the Nigerian National Petroleum Corporation (NNPC) and the introduction of joint venture arrangements with IOCs were part of this broader strategy.

In 2010, the Nigerian Content Development and Monitoring Board (NCDMB) was established to further promote local participation across all aspects of the oil and gas value chain. The recent wave of asset transfers represents a culmination of those policy efforts, finally giving rise to a viable and competitive class of Nigerian oil producers.

Looking Ahead: Building a Balanced Energy Future

As Nigeria navigates the evolving energy landscape, balancing oil production with environmental sustainability and economic inclusivity will be key.

The country still relies heavily on oil exports for government revenue and foreign exchange, making it essential to ensure stability and performance in the sector. At the same time, global momentum toward renewables means Nigerian firms must also start exploring energy diversification to remain relevant in the long term.

Investments in gas infrastructure, refining capacity, and renewable energy projects could help create a more balanced energy ecosystem. Indigenous firms that capitalize on this transition stand to become not only national champions but regional energy leaders as well.

Conclusion

Nigeria’s oil industry is undergoing a transformative shift, with indigenous companies stepping into roles historically dominated by foreign firms. While the path forward will require careful navigation of financial, environmental, and regulatory terrain, the opportunity for national wealth creation and economic self-determination has never been greater.

This evolution represents more than a change in asset ownership—it is a defining chapter in Nigeria’s journey toward energy sovereignty and inclusive prosperity.