As leaders convene at the U.N. climate conference in Dubai to deliberate on the imperative shift from oil to low-carbon energy solutions, the global focus turns to Nigeria’s oil industry and the critical need for reform in the divestment process. Nigeria’s transition serves as a pivotal example, shedding light on the complexities and ramifications of the oil industry’s restructuring.
Historically, oil giants such as Shell, ExxonMobil, Chevron, Total, and ENI/Agip, in partnership with the Nigeria National Petroleum Corporation, monopolized oil and gas production in Nigeria’s Niger Delta. However, the enactment of Nigeria’s Local Content Bill in 2010 and escalating social unrest prompted these multinational corporations to begin divesting marginal, high-risk onshore and nearshore assets to domestic companies. Consequently, there is a looming scenario where all onshore and nearshore assets in the Niger Delta will transition to the ownership and operation of domestic entities by 2030.
The ongoing oil divestment in Nigeria transpires in the absence of effective government regulation. Nigeria’s historical dependence on oil revenue has fostered non-transparency, corruption, and governmental dysfunction, enabling the oil industry to operate with minimal restraint, exacerbating environmental degradation and disregarding the well-being of local communities.
Amidst the global discourse surrounding reduction in high-carbon holdings to align with climate objectives, multinational oil corporations are predominantly offloading high-risk assets in socially distressed areas such as the Niger Delta to domestic entities with lower environmental standards. Paradoxically, this shift leads to escalated carbon emissions and environmental harm, camouflaging a net environmental detriment under the guise of environmental responsibility.
Communities in the Niger Delta harbor deep-seated suspicions regarding the motives behind the divestment, alleging that oil majors aim to evade accountability for decades of environmental neglect. The lack of due diligence by the new operators, coupled with inadequate financial and technical capacities, poses severe operational risks. Furthermore, disagreements over asset ownership and operational responsibilities have culminated in legal disputes. These concerns materialized when the Nembe community in Bayelsa State placed a prescient caveat emptor decree on a proposed sale from Shell to Aiteo, foreseeing the ramifications of the transfer in subsequent blowouts and spills.
Local communities continue to voice apprehensions about abandoned oil facilities, likening them to landmines scattered across the Niger Delta, posing imminent threats of explosions, groundwater contamination, ecosystem disruption, and health hazards. The legacy of environmental degradation in the Niger Delta remains a dark stain on the world’s climate consciousness, reflecting Nigeria’s reluctance to transition from oil. The government’s current incentives for oil and gas production further perpetuate this resistance, contradicting the urgent imperative for sustainable energy alternatives.
To counter this perilous trajectory, civil society organizations in the Niger Delta advocate for a new code of conduct for responsible divestment of oil and gas assets, expedited plans for the safe decommissioning of oil facilities, inclusive involvement of host communities and state governments in divestment and decommissioning decisions, and advocacy for a global U.N. Multilateral Environmental Agreement on fossil fuel divestment and decommissioning.
Amidst the resistance to transition, Nigeria’s new president, Bola Tinubu, stands at a crossroads, tasked with steering the nation’s approach to oil industry divestment, decommissioning, and abandonment towards a model that exemplifies a Just Transition. This transformation holds the promise of rectifying six decades of rapacious oil extraction in the Niger Delta.
Rick Steiner, a distinguished conservation scientist with a global footprint in oil and environmental issues, and Iniruo Wills, an esteemed legal practitioner and environmental activist, bring forth their extensive expertise and insight to illuminate the imperative reforms required in Nigeria’s oil industry. Their collaborative effort underscores the imperative nature of the transformation, advocating for a sustainable and just model that transcends the tumultuous legacy of oil extraction in the Niger Delta.
In this shifting landscape, Nigeria’s journey towards a sustainable energy transition stands as a beacon of hope, narrating a compelling saga of resilience, reform, and redemption in the face of environmental adversity. As the global community witnesses this metamorphosis, the imperative pursuit of a sustainable and equitable future for Nigeria and the Niger Delta resonates as a universal endeavor, transcending borders and cultures.
