2024: A Transformative year for Nigeria’s oil, gas industry

Nigeria’s oil and gas industry experienced a transformative year in 2024, marked by a series of groundbreaking business deals, partnerships, acquisitions, and divestments that reshaped the sector’s landscape.

From international oil companies (IOCs) shifting focus to indigenous firms expanding their operations, the developments underscored a pivotal shift in the country’s energy dynamics.

International oil giants, including Shell and TotalEnergies, continued to divest their onshore assets, transferring them to local players like Seplat Energy and Oando PLC.

These moves reflect a broader strategy by IOCs to prioritize offshore operations, distancing themselves from challenges such as pipeline vandalism and environmental issues that frequently impact onshore projects.

At the same time, local companies demonstrated resilience, seizing opportunities to invest in onshore assets despite the risks. Their investments underscore a growing confidence in Nigeria’s indigenous energy sector to lead the way in boosting production and addressing local challenges.

Norwegian energy giant Equinor ASA finalized its exit from Nigeria by selling its 53.85% stake in OML 128 and a 20.21% share in the Agbami field to Chappal Energies for up to $1.2 billion. The sale marked the end of Equinor Nigeria Energy Company’s operations, as the firm aims to streamline its international portfolio.

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Seplat Energy completed the acquisition of Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil. The $1.2 billion deal, initiated in February 2022 and concluded in December 2024 after regulatory delays, is expected to double Seplat’s production capacity to 120,000 barrels of oil equivalent per day.

TotalEnergies advanced its plans to divest from Nigeria’s onshore sector, selling a 10% stake in Shell Petroleum Development Company (SPDC) to Chappal Energies. The divestment includes interests in 15 SPDC JV licenses and three additional gas-focused licenses.

Despite these sales, TotalEnergies retains economic rights in gas production licenses that supply 40% of Nigeria LNG’s feedstock.

Oando Plc acquired the Nigerian Agip Oil Company (NAOC) from Italian energy firm Eni in a $783 million deal. This acquisition consolidates Oando’s position as a major upstream player and reinforces the role of indigenous companies in driving Nigeria’s energy sector forward.

Shell Nigeria Exploration and Production Company Limited (SNEPCo) announced a $5 billion Final Investment Decision (FID) for the Bonga North deep-water project.

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The initiative includes 16 new wells, infrastructure upgrades, and is expected to produce 350 million barrels of crude oil.

Supporting this development, Saipem, in partnership with Nigerian firms KOA Oil & Gas and AVEON Offshore, secured a $1 billion contract to execute engineering, procurement, construction, and installation activities.

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The Nigerian National Petroleum Company Limited (NNPCL) and TotalEnergies announced a $550 million FID for the Ubeta oilfield (OML 58).

This project aims to extract 900 billion cubic feet of natural gas, bolstering Nigeria’s efforts to harness its gas reserves for domestic and export markets.

The divestments and investments of 2024 signal a significant shift in Nigeria’s oil and gas sector. While IOCs focus on offshore developments, indigenous companies are stepping up to take charge of onshore assets, bringing a new sense of ownership and responsibility to the industry.

President Bola Tinubu has reiterated his administration’s commitment to enhancing energy security, improving production, and fostering an environment conducive to private sector growth. As these projects progress, their impact is expected to extend well into 2025 and beyond, shaping Nigeria’s energy landscape for years to come.