According to the Economist Intelligence Unit, an international business research firm, indigenous oil companies acquiring the assets of divesting international oil companies will not be able to match their investing power.

In its latest Country Report on Nigeria, the EIU noted that indigenous companies would not possess the same financial strength for investment as the multinationals, which have been the primary drivers of the Nigerian oil industry since its establishment.

There is a concern that in 2024, there could be a net withdrawal of foreign direct investment, as was the case in the previous year, due to being undermined by corruption, cronyism, rampant insecurity and a massive infrastructure gap.

“Multinationals are increasingly deciding to quit Nigeria or reduce their presence; we estimate there was a net withdrawal of foreign direct investment in 2023, to be repeated in 2024 as naira losses exert pressure on balance sheets carrying large foreign liabilities,” the EIU said.

Recall that certain foreign oil companies have finalized plans to sell their onshore oil businesses for relocation offshore.

Shell Plc has reported that it has finalized an agreement to sell its Nigerian onshore subsidiary, The Shell Petroleum Development Company of Nigeria Limited, to Renaissance, a consortium of five companies, which includes four exploration and production companies.

ExxonMobil, Equinor, and TotalEnergies have all signaled their intention to divest their stakes in Nigeria’s onshore oilfields.

The Minister of State for Petroleum (Oil), Heineken Lokpobiri, mentioned that the divestment by certain international oil companies could be a win-win situation, as it would create opportunities for indigenous companies to enhance their capacity in onshore and shallow water areas.

The Governor of Imo State, Hope Uzodinma, also raised concerns about foreign oil firms not being genuine investors, questioning their decision to abandon onshore for offshore.