Energy
Stakeholders Seek Fresh Bidding for $243m Pipeline Stake
Stakeholders have urged the Federal Government to initiate a new competitive bidding process for the planned sale of a 40 per cent interest in the Amukpe–Escravos Pipeline, while opposing efforts to resurrect an earlier transaction that had already been terminated.
Amid growing concerns, stakeholders are urging a fresh valuation to establish the true worth of the disputed asset, citing the possible impact of the outcome on investor confidence in Nigeria’s oil and gas industry.
The Amukpe–Escravos Pipeline, which runs from Amukpe in Delta State to the Escravos export terminal in Warri, is jointly owned by Pan Ocean Oil Corporation, which holds 40 per cent, and NNPC Exploration & Production Limited, which controls the remaining 60 per cent.
The asset, with a transportation capacity of about 160,000 barrels per day, has become a strategic crude evacuation route in the western Niger Delta since it became operational in 2022 and has reportedly maintained operational uptime above 95 per cent.
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It was learnt that the proposed sale of Pan Ocean’s 40 per cent stake is tied to a debt restructuring and recovery arrangement involving lenders and the Asset Management Corporation of Nigeria, under which proceeds from the disposal are expected to be used to settle outstanding obligations.
The divestment process has, however, been entangled in disputes over valuation and transaction history.
It was gathered that an earlier transaction involving the proposed acquisition of the 40 per cent stake, valued at about $243m, collapsed in October 2024 after the buyer allegedly failed to meet payment obligations and commercial conditions attached to the deal. Concerns later emerged after indications that the transaction was being revisited using valuation benchmarks linked to the failed process.
An independent assessment reportedly conducted in 2025 was said to have subsequently valued the 40 per cent stake at between $544m and $641m, instead of $243m.
The valuation gap has been fuelling criticism from industry observers, who argued that disposing of the asset below current market value could short-change the country and weaken confidence in regulatory and commercial processes within the oil and gas sector.
Speaking during a recent interview on national television, the Managing Director of Policy Management Consult Services, Jide Olatuyi, said renewed efforts to revive the failed transaction had raised broader concerns about governance, transparency and the credibility of Nigeria’s investment environment.
“What stakeholders are saying is that there is a need for a new competitive bidding process rather than attempting to revive a dead transaction,” Olatuyi said.
He dispelled thoughts that opposition to the proposed transaction was driven by sentiment or commercial rivalry, saying the issue was fundamentally about governance standards.
“I don’t think it is about sentiment at all. It is about governance in the oil and gas sector,” he stated.
According to him, Nigeria’s challenge is no longer limited to attracting investors but also ensuring that investors have confidence in the integrity of the country’s commercial and regulatory processes.
Olatuyi added that several stakeholders, including project lenders such as Sterling Bank and the Asset Management Corporation of Nigeria, had advocated a transparent process that reflects current market realities and updated asset valuations.
He urged the authorities to ensure that any future transaction involving the asset is conducted through an open, transparent and competitive process capable of inspiring investor confidence and safeguarding public value.
“If you are not committed to transparency, it becomes a problem for investors. If you cannot build trust and confidence in the sector, capital will go elsewhere,” he asserted.
Earlier, a public affairs analyst and Executive Director of the Development Specs Academy, Prof. Okey Ikechukwu, also called for the immediate suspension of processes relating to the proposed sale, warning that proceeding with the transaction under the current terms would amount to a giveaway of a strategic national asset.
“If that is allowed to happen, it means there is no governance. It means that people can exercise arbitrary discretion. It means that processes can be routinely violated,” he said.
The don argued that reviving the sale on the basis of disputed or outdated valuation benchmarks would undermine due process and public confidence.
“We are not under any desperate need to sell it at a giveaway price, and that’s what appears to be happening here. If that is allowed to happen, then it means there is no governance,” he cautioned.
Referring to the pipeline as a “performing national asset,” Ikechukwu argued that any sale of such an asset must reflect its true market value, stating, “If you must sell a performing national asset, it must be sold at the right value.”
He also warned that proceeding without an updated valuation process could erode investor confidence and raise concerns among lenders.
“But beyond all of that, where will investor confidence be? If you are a lender, how do you feel in this kind of environment? It might even be interpreted as sabotage,” he said.
Ikechukwu called for the immediate suspension of all ongoing processes connected to the proposed transaction.
“All processes leading up to the presumed attempt to sell it now should be stopped. Quite frankly, terminated. An independent evaluation should take place so that we know the current value of what is on the table and ensure that the country does not lose money in the process.”
A United States-based energy consultant, Chukwuma Atuanya, said the Amukpe–Escravos Pipeline had improved crude evacuation and strengthened Nigeria’s oil export reliability since it became operational in 2022.
“Since inauguration, the underground system has demonstrated exceptional uptime and asset integrity, outperforming comparable overground pipelines in the region,” he said.
He added, “Its burial depth and bypassing of traditional security hot spots also serve as a significant competitive advantage for product delivery to Escravos.”
Courtesy – The Punch
In the bid to ease crude oil offtake by domestic refiners, address pricing and logistics challenges, the Nigerian government is taking a look at proposals for direct crude supplies and discounts to domestic refineries.
The Crude Oil Refinery-owners Association of Nigeria (CORAN), revealed that the proposals touch on allowing producers to deliver crude directly to nearby refineries and granting refiners a discount for transportation and handling costs embedded in the price of crude.
This was disclosed in a report by Reuters on Wednesday.
The report read, “The Federal Government is considering changes to crude allocation and pricing rules to improve feedstock access for its refiners, including Dangote Refinery.”
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The review comes as compliance with the domestic crude supply framework improved sharply in the second quarter of 2026, although refiners continue to complain that the cost and structure of domestic crude transactions make locally sourced feedstock expensive.
A spokesperson for CORAN, Eche Idoko, told Reuters that one of the proposals would enable producers, particularly those operating within international oil companies’ networks, to deliver crude directly to refineries located close to their production facilities.
Under the arrangement, the crude volumes could subsequently be reconciled at the relevant terminal, potentially reducing the need to transport the crude through longer trunkline routes.
Idoko said the proposal would bring crude closer to refineries while reducing some of the logistics costs associated with domestic supply. A second proposal would address the pricing component of domestic crude transactions.
Under the arrangement, refiners that lift crude directly from production facilities could receive a discount corresponding to freight and handling costs incorporated into the Brent-linked price of crude but which the refiners do not actually incur.
Idoko described the proposed arrangement as beneficial to both sides of the transaction. “Under one proposal, a producer linked to an IOC’s network could deliver crude directly to a nearby refinery, with volumes reconciled later at the terminal.
“This would reduce reliance on trunklines and bring crude closer to refiners. A second proposal would allow refiners that lift crude directly from production facilities to receive a discount reflecting the freight and handling costs embedded in Brent-linked pricing but not actually incurred by them. This could be a win-win for both the producers and refiners,” the report noted.
The proposed changes are coming against the backdrop of complaints by local refiners that the pricing structure for domestic crude makes their feedstock more expensive than necessary.
Recall that the Dangote Petroleum Refinery and Petrochemicals (DPRP) had estimated that Nigeria’s pricing structure could add between $3 and $4 per barrel to the cost of crude purchased by domestic refiners because transactions are often routed through trading arms of producers.
Energy analysts have similarly identified pricing, rather than the physical availability of crude, as one of the major challenges facing domestic refiners. The issue is particularly significant for the Dangote Refinery, Africa’s largest refinery, which has a nameplate capacity of 700,000 barrels per day.
Although the refinery has significantly increased its operations, securing adequate volumes of locally produced crude at competitive prices remains a key issue for the development of Nigeria’s refining industry.
Nigeria has met and exceeded its Organisation of Petroleum Exporting Countries (OPEC) quota of 1.5mbpd for the third consecutive month.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) disclosed this in a statement on Tuesday.
The statement has it that in July 2026, Nigeria produced 1.505mbpd of crude oil and 0.17mbpd of condensate, making combined daily production to 1.67mbpd.
During the month under review, the daily peak production of crude oil and condensate was 1.78mbpd, while the lowest daily production was 1.57mbpd.
Although Nigeria met its OPEC quota in July, the statistics show that, on a month-on-month basis, production fell by 4 per cent.
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The NUPRC attributed the decline in production to operational challenges at the Erha and Akpo fields, which affected output during the period under review.
These disruptions constrained production volumes and contributed significantly to the overall reduction in national crude oil output.
Despite the challenges, production operations across most other producing assets remained relatively stable, with operators implementing measures to maintain production efficiency and minimise the impact of operational constraints.
Crude oil and condensate supply to local refineries rose by 88.4 percent to 53.7 million barrels in the second quarter of 2026, Q2’26, from 28.5 million barrels in the first quarter, Q1’26, the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, has said.
The commission, in its Q2 2026 statistics on the enforcement of the Domestic Crude Supply Obligation, DCSO, said the 53.7 million barrels supplied to domestic refiners represented 97.4 percent performance during the quarter.
The DCSO is being enforced by the NUPRC pursuant to Section 109 of the Petroleum Industry Act, PIA, which provides for the supply of crude oil produced in Nigeria to domestic refineries.
According to the commission, the increase in crude supply coincided with higher domestic oil production and the execution of long-term crude supply agreements supported by bankable Sales and Purchase Agreements, SPAs, between producers and domestic refiners.
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The NUPRC said it conducts monthly consultations with crude oil producers and licensed domestic refineries, following which specific volumes of crude oil and condensate are allocated to producers for supply to local refiners.
It, however, noted that the DCSO operates on a “willing buyer, willing seller” basis in accordance with the PIA, which affects the volumes eventually supplied and accepted.
In April, the NUPRC allocated 18.13 million barrels to producers, while producers offered 19.31 million barrels to domestic refiners. Actual supply stood at 20.88 million barrels, representing 114.9 percent performance against the allocation.
In May, the commission allocated 18.78 million barrels, while producers offered 23.19 million barrels to local refiners. Actual supply fell to 14.23 million barrels, representing 75.8 percent compliance.
Supply increased in June, with the NUPRC allocating 18.17 million barrels to producers, while producers offered 26.84 million barrels to refiners. Actual supply stood at 18.61 million barrels, representing 102.4 percent performance.
The commission said the figures showed that the DCSO was being actively administered and enforced, adding that the improvement was supported by increased crude production and stronger commercial arrangements between producers and refiners.
At the refinery level, the NUPRC said Dangote Refinery required 63 million barrels of crude in Q2, while producers offered 68.1 million barrels.
The 68.1 million barrels offered represented 98 percent of the total crude volumes offered by producers during the quarter.
However, the refinery accepted 52.6 million barrels, representing 78 percent of the volume offered to it.
The NUPRC said it remained committed to supporting the Federal Government’s objective of achieving energy sufficiency by leveraging the PIA to sustain the growth in crude oil production and continuously enforce the DCSO.
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