Concerns Arise Over International Oil Companies’ Exit From Nigeria’s Onshore Oil Business

Former SPE President Warns of Long-Term Impact on Economy and Workforce

The recent exit of International Oil Companies (IOCs) , notably Shell, from Nigeria’s onshore oil business has raised concerns about the long-term implications for the nation’s economy and workforce, according to Joe Nwakwue, former President of the Society of Petroleum Engineers.

In an interview with ARISE NEWS on Thursday, Nwakwue expressed apprehension over the departure of major IOCs and highlighted potential challenges related to the trainability of future industry professionals.

While acknowledging that the takeover of Shell’s assets by indigenous companies, particularly Renaissance, could lead to increased production and benefit the country, Nwakwue voiced worries about the broader economic impact.

He pointed out that the trend of IOCs leaving the country raises questions about the ease of doing business and poses a potential threat to long-term sustainability.

The former President of the Society of Petroleum Engineers, Joe Nwakwue

Nwakwue remarked, “We were lucky to have five of the big majors in the country, and as we speak now, three have exited the onshore and shallow water, and that to me is worrisome. We need to look at why they are going. You know, we talk about asset rationalization, we talk about all that, but there is serious ease of doing business challenges, and I think that’s contributing to these exits.”

Concerns were also raised regarding the capacity of the indigenous entities to take over the assets. Nwakwue acknowledged their capability in the present but emphasized the need to assess their long-term capacity-building efforts.

He highlighted that many professionals in the industry were trained by these exiting IOCs, and sustaining such competence in the long run is crucial.

The former SPE President drew attention to the evolving challenges in the oil and gas industry, noting that as Nigeria moves into more complex and costly oil and gas production, technological advancements become essential. The departure of IOCs could mean a loss of opportunities to domesticate the research products and technology they traditionally provided.

Despite his reservations, Nwakwue recognized the positive aspects of the transition, stating, “I think that overall, it’s a positive step. Remember that not a lot of investment has gone into this asset in the last 10/15 years. So, we need some players who can change that narrative.”

In response to questions about Shell’s continued involvement in the venture, Nwakwue clarified, “No, I think there will be some handholding for a period which is normal in such transactions. But after that, Renaissance will still assume total control of operations.”

Regarding the relationship between this sale and the Petroleum Industry Act (PIA), Nwakwue explained that it would depend on the actions of the acquiring companies going forward. He highlighted that the new owners would operate under a stricter regulatory regime introduced by the PIA.