The oil and gas production in Nigeria is being severely impacted by the Western ESG strategies that are forcing IOCs to reconsider their upstream and downstream operations worldwide, resulting in major reshuffling and divestments of assets. Nigeria, one of OPEC's leading oil producers, has already seen $21 billion worth of assets divested, putting its future in jeopardy. In contrast to Western NGO's strategies, NGOs in Nigeria, such as "We, the People," are calling for a government moratorium to prevent further divestments in the Niger Delta. The NGO is concerned that if oil companies are allowed to divest without cleaning up the entire Niger Delta region, the environmental issues in the area will never be addressed. Despite the ongoing divestments, African nations, including Nigeria, need to be given time to transition to using gas as their transition fuel, according to Ainojie Alex Irune, CEO of Oando Energy Resources. More investments and production are needed to counter expected demand growth in the future on the continent. In addition, NJ Ayuk, Executive Chairman of Africa Energy Chamber, believes that the continent needs to leverage its immediate resources to eliminate energy poverty, as Africa is a gas continent.
The regulatory uncertainty of Nigeria's oil and gas sector prior to the enactment of the Petroleum Industry Act 2021 and ESG-related fossil fuel divestment schemes forced by energy transition and COVID-19 are the main reasons for the divestments, according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). Nigeria's yearly capital expenditure in the upstream arm of the oil sector decreased by over 70% within a period of eight years. The country's total annual upstream capital expenditure decreased by 74% from $27 billion in 2014 to less than $6 billion in 2022, and competition from regional peers has led to a decrease in the proportion of the overall upstream investment attracted by Nigeria.