New opportunities are opening up for local players as international oil companies abandon Nigeria or move into deeper waters to avoid disrupting onshore assets.

Making headlines this year, Nigerian oil and gas company Seplat announced the acquisition of ExxonMobil's shallow water offshore operations in the country for $1,2 billion.

The transaction is almost complete, helping to strengthen local empowerment in the oil and gas sectors although the acquisition of the entire share capital of Mobil Producing Nigeria Unlimited still requires ministerial consent and regulatory approvals.

Seplat has projected that the deal will create one of the largest independent energy companies on the Nigerian and London stock exchanges, where it is listed. Board chairman Ambrosie Orjiako reiterated in March that the deal was on track, after reports that the Nigerian National Petroleum Corporation (NNPC) was trying to block it.

“As a significantly larger company, with a stronger resource base and significantly enhanced capabilities, we will be better placed to deliver sustainable energy solutions that drive growth and profitability for the benefit of all our stakeholders, particularly our host communities and the broader Nigerian economy,” he said, highlighting the benefits of the agreement.

However, Shell, which has been present in Nigeria since the start of production, has expressed its concern by announcing that it will put its last onshore assets up for sale. Shell cites problems with communities as well as pressure to switch to cleaner energy.

CEO Ben van Beurden told investors last September that "the balance of risks and rewards associated with our onshore portfolio is no longer compatible with our strategic ambitions. We cannot solve the community issues in the Niger Delta and the company has entered into discussions with the government on how to move forward."

It is worth noting that Seplat is among those reportedly in the running for part of Shell's onshore assets, alongside other local players such as Sahara Energy, Heirs Oil and Gas Ltd and ND Western, Bloomberg news agency reported, citing sources close to the matter.

However, the deal was delayed by a court ruling that ordered Shell and its joint venture partner, NNPC, to pay $2 billion to the Ejalawa community in Rivers State and repair damage caused by the oil spills before it could be completed.

Developing opportunities for locals

One of the triggers for the surge in economic empowerment in the indigenous oil industry was the passage of the Local Content Act in 2010. It opened up prospects for locals to gain greater participation in this lucrative industry.

Seplat's deal with ExxonMobil is the latest in a series of similar deals with oil majors that have created significant local players in the sector.

Already in 2015, Oando paid a whopping $1,6 billion to buy the local onshore assets of US oil major ConocoPhillips, while other companies such as Seplat, Shoreline Natural Resources, Seven Energy and Lekoil have acquired similar assets over the past decade in deals worth around $11,5 billion.

The local content law complemented the indigenization of the ecosystem. However, it achieved impressive progress even if it did not achieve its ambitious objectives, namely a national added value of 70% in ten years.

As a result, 50% of all engineering work is done by Nigerians and 40% of ships are produced locally. Several thousand jobs have been created and the number of registered service companies has increased from 44 to 92 in 11 years.