House of Reps Halts Oil Company Divestments Over Unresolved Liabilities

Gloria Ikibah

5 hours ago

…as lawmakers callRepresentativelegal framework on oil company divestment

By Gloria Ikibah

The House of Representatives has called on the federal government to immediately suspend all divestment moves by Shell, TotalEnergies, and other International Oil Companies (IOCs) until their outstanding environmental, social, and financial liabilities are properly addressed. Lawmakers insist that no sale or transfer of assets should proceed without full transparency and direct consultation with Niger Delta communities and state governments.

Additionally, the House is pushing for the creation of an Environmental Restoration Fund, funded by the IOCs, to tackle the estimated $100 billion in damages outlined by the United Nations Environment Programme (UNEP) and the Bayelsa State Commission. Legislators also demand the introduction of profit-sharing arrangements to ensure host communities receive direct benefits from oil and gas revenues.

The Upstream Petroleum Regulatory Commission has been directed to strictly enforce the Petroleum Industry Act (PIA) by scrutinizing all divestment applications, ensuring corporate accountability, and thoroughly assessing the financial, technical, and environmental capacity of new operators before approvals are granted.

These resolutions followed a motion of urgent national importance sponsored by House Minority Leader, Rep. Kingsley Chinda, titled “The Need to Protect Environmental Integrity, Community Welfare, and Regulatory Independence in the Niger Delta by Halting Divestments of International Oil Companies, including Shell and TotalEnergies.” The motion was debated and adopted during Thursday’s plenary session.

Speaking on the motion, Chinda emphasised the federal government’s responsibility to safeguard the rights and welfare of its citizens, particularly Niger Delta residents, who have suffered decades of environmental degradation and socio-economic hardship due to oil exploration. He warned that approving divestments without resolving these long-standing issues would set a dangerous precedent.

The motion reads in part: “The House notes that the Nigerian Petroleum Industry Act, PIA, vests the Nigerian Upstream Petroleum Regulatory Commission with the responsibility to regulate the upstream petroleum sector in line with national interests and global best practices.

“The House also notes that independent assessments, including those by the United Nations Environment Programme, UNEP, and the Bayezid State Oil and Environment Commission, have documented the catastrophic environmental and health impacts of oil exploration in the Niger Delta, including contaminated water sources, soil infectivity, loss of biodiversity, and public health emergencies.

“The House is aware that recently the Nigerian Upstream Petroleum Regulatory Commission has rejected Shell’s divestment application, citing failure to address environmental liabilities and concerns about the capacity of the Renaissance Consortium to manage the assets effectively.

“The House is also aware that past divestment by IOCs, such as Shell’s sale of assets in Nembe to Aleppo, ExxonMobil’s transfer, and E&I’s agile sale to Rwanda have left communities with unresolved pollution, worsened environmental degradation, and increased social unrest.

“The House is concerned that approving Shell and Total Energy’s divestment request, without addressing these historical and ongoing liabilities, risks undermining Nigeria’s regulatory independence, transferring corporate responsibilities to the Nigerian state, and signaling impunity for environmental crimes.

“The House is also concerned that allowing IOCs to divest without accountability will jeopardize the future of the Niger Delta, undermine Nigeria’s sovereignty, and burden the Nigerian people with the economic and environmental costs of cleanup.

“The House believes that a comprehensive and transparent review process, including full disclosure of environmental liabilities and enforceable commitments for cleanup and reparations, must precede any approval of IOC divestments.

“The House is worried that if regulatory independence is not safeguarded to uphold the rule of law and protect national interests against undue corporate and political interference, the sovereignty of the country will be threatened and citizens’ trust in the government would further diminish”.

Lawmakers who spoke in support of the motion acknowledged the federal government’s ongoing efforts to address oil industry challenges through relevant agencies.

Chairman of the House Committee on Petroleum Upstream, Rep. Alhassan Ado Doguwa, emphasized that legislative intervention would enhance these efforts, ensuring a more comprehensive approach to managing oil sector transitions.

“This motion not only allows us to tackle the pressing issues affecting our people, but it also provides an opportunity to revisit existing legal frameworks. We must introduce permanent statutory provisions to address gaps that were overlooked during the enactment of the Petroleum Industry Act (PIA),” Doguwa stated.

He further clarified misconceptions about divestment, explaining that International Oil Companies (IOCs) are not physically exiting Nigeria but rather shifting investments from shallow-water to deep-sea operations.

“Divestment, in this context, does not mean these companies are leaving Nigeria entirely. They remain committed to their corporate, commercial, and economic responsibilities within the sector. It is essential that this distinction is understood,” he added.

Deputy Chairman of the House Committee on Environment, Rep. Tersee Ugbo, noted that multiple committee sessions and retreats had revealed a critical oversight: the PIA lacks clear provisions on how divestments should be handled.

“We discovered that divestment was completely omitted from the PIA, and there are no proper legal guidelines for how IOCs should exit their investments. This gap has led to discussions on the need for a Divestment Act to establish a structured framework for such transitions,” Ugbo explained.

Lawmakers stressed that without a well-defined regulatory structure, unchecked divestments could pose significant economic and environmental risks to host communities and the country at large.

The Deputy Speaker, Rep. Benjamin Kalu who presided over plenary in his ruling refers the motion to the Committee on Host Communities, Committee on Environment, Committee on Petroleum Resources Upstream, and Committee on Legislative Compliance and repoet back in foru weeks for further legislative action.