Abstract

The recent divestments of exploration and production (E&P) interests or leases in the onshore areas of the Nigerian Niger Delta by some international oil corporations (IOCs) that operated these upstream assets for decades under a joint venture with the Nigerian National Petroleum Corporation reflects a preference to focus more on deepwater prospects and possibly due to other international energy industry developments. In the same vein, a growing number of Nigerian-owned independents show the required capacity to acquire and operate these onshore leases, thus, leading to new upstream consortiums and Joint Venture arrangements. The enactment of the Petroleum Industry Act 2021, its implications on leases and licenses granted under the previous legal framework, and the issuance of the 2021 Guidelines and Procedures for Obtaining the Minister’s Consent to the Assignment of Interests adds to the interesting dynamics of efficiently negotiating and completing the divestment and acquisition processes. Consequently, this paper highlights the legal framework governing the ownership of upstream E&P interests in Nigeria from an international petroleum transactions perspective and the assignment of such interests. Such a transfer of upstream interests could arise due to the change in control or ownership of equity in the company holding the lease or interests. It is essential to understand (i) the nature of these E&P assets, and (ii) the conditions attributable to owning such upstream petroleum assets following the divestments and acquisition process. Other noted issues include environmental concerns such as future decommissioning and carbon emissions management obligations for the acquiring party.