A new report by the Human and Environmental Development Agenda (HEDA Resource Centre) has revealed widespread corruption, lack of due process, and regulatory failures in Nigeria’s 2020/2021 marginal oil field bid round.
Titled “Marginal Fields’ Awards, Regulators’ Independence, and Environmental Injustice: Paradox of Beneficial Ownership and the Host Communities,” the report highlights how indigenous communities in the Niger Delta remain marginalized amid concerns over potential asset abandonment due to international oil companies (IOCs) divesting from onshore operations.
Regulatory Failures and Corruption
The report details how Nigeria’s oil sector continues to suffer from weak legislation and a regulatory framework shaped by elite politics and corruption. It asserts that the same lack of transparency that has historically plagued the allocation of oil wells and contracts was evident in the 2020/2021 marginal field awards.
HEDA points to the failure of key regulatory bodies, including the Nigerian National Petroleum Corporation (NNPC)—now the Nigerian National Petroleum Company Limited (NNPCL)—and the defunct Department of Petroleum Resources (DPR), now the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). According to the report, these agencies failed to enforce transparency and accountability in the bidding process, undermining the objectives of the Petroleum Industry Act (PIA).
Environmental and Socioeconomic Impact
The Niger Delta region, home to many of these marginal fields, has suffered extensive environmental degradation due to decades of oil exploration. The report highlights that oil spills, gas flaring, and other extractive activities have devastated local communities, resulting in loss of livelihoods, poor living conditions, and increased exposure to disease.
Furthermore, the divestment of IOCs from onshore oil operations raises fears that abandoned assets will exacerbate environmental damage. The report cites Shell’s January 2024 decision to sell its Nigerian onshore subsidiary, Shell Petroleum Development Company (SPDC), to Renaissance Africa Energy Company Limited for $1.3 billion. Despite concerns from stakeholders, the Nigerian government approved the deal in December 2024.
The report underscores the urgent need for transparency, accountability, and stronger regulatory oversight in Nigeria’s oil and gas sector. It warns that unless systemic corruption is addressed, the country’s oil wealth will continue to benefit a select few at the expense of host communities and environmental sustainability.