Energy And Natural Resources Practice Group

INTRODUCTION

Welcome to the Energy and Natural Resources Quarterly newsletter. At the intersection of law, policy, and industry, the energy and natural resources sectors in Nigeria continue to evolve rapidly. In this maiden edition, we bring you timely insights, legal updates, and strategic commentary on the developments shaping the future of oil & gas, power, renewables, and mining.

From regulatory shifts to landmark transactions and sustainability trends, our Energy and Natural Resource team at SSK is committed to helping clients navigate complexity with clarity.

In this issue, we will explore key events and updates in the following sectors:

• Oil & Gas:
  • Upstream,
  • Midstream and Downstream
• Power
• Renewable Energy
• Mining

Stay informed as we delve into significant events and trends shaping these industries, while offering essential insights into their current landscape.

OIL & GAS

1. UPSTREAM

1.1. OIL AND GAS MULTINATIONAL EXIT NIGERIA ONSHORE OPERATIONS

On 13 March 2025, Shell Global announced the sale of its Nigerian onshore subsidiary, Shell Petroleum Development Company of Nigeria Limited (SPDC), to Renaissance Group for $2.4 billion. The Renaissance Group is a consortium of four Nigerian exploration and production companies, ND Western Limited, Aradel Holdings Plc, First Exploration & Petroleum Development Company Limited, Waltersmith Petroman Oil Limited, and an international energy group, Petrolin Group.¹

Renaissance Group now owns and controls SPDC's 30% stake in the SPDC JV which holds 18 onshore and shallow water mining leases and is an unincorporated joint venture with Nigerian National Petroleum Corporation Ltd (55%), Total Exploration and Production Nigeria Ltd (10%) and Agip Energy and Natural Resources (Nigeria) Limited (5%).

Nevertheless, Shell Nigeria Exploration and Production Company Limited (SNEPCo), a subsidiary of Shell Plc, has announced a Final Investment Decision (FID) on Bonga North, a deep-water project off the coast of Nigeria.² This significant investment reflects Shell's diversion from upstream operations to the deepwater frontier.

1.2 BILLS INTRODUCED AT THE NATIONAL ASSEMBLY IN Q1 2025

The National Commission for Decommission of Oil and Gas Installations (NC-DOGI) Bill, 2025³ : The Bill primarily seeks to establish the National Commission for Decommissioning of Oil and Gas Installations (NC-DOGI) as an autonomous body under the presidency. It empowers the commission to oversee and coordinate decommissioning efforts as part of Nigeria's environmental diplomacy strategy, ensure autonomy in decision-making, and protect national interests through sustainable resource management, environmental restoration, and international collaboration. It aims to position the country as a leader in sustainable resource management and climate action. The Bill also provides for the establishment of a Decommissioning Fund to ensure financial responsibility and effective operations. The bill underwent its first reading on 17th December 2024 and second reading on 6th March 2025 at the House of Representatives. Thereafter, the Bill was referred to the House of Committee on Petroleum Resources (Upstream).

1.3 NIGERIA'S OIL PRODUCTION FAILS TO REACH BUDGET BENCHMARK

The Organisation of Petroleum Exporting Countries (OPEC) reported that Nigeria's crude oil production averaged 1.51 million barrels per day (bpd) in March 2025, from 1.54 million bpd in February 2025. This falls short of the 2025 budget target of 2.06 million bpd. According to the report, despite the decline, Nigeria's oil output was the largest in Africa, surpassing Algeria and Congo.⁴

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) monthly oil production report revealed that aggregate output increased by 3.6% to 47.7 million barrels, implying a daily average output of 1.54 million barrels, excluding condensates of 198,783 bpd. Nevertheless, the NUPRC has set a production target of at least 2.1 million barrels of oil per day (MBOPD) by 2025.⁵ Engr. Gbenga Komolafe, Chief Executive of NUPRC, had announced during his presentation at the 2025 Nigeria International Energy Summit (NIES) that Nigeria's rig count had increased from 8 in 2021 to 40 in 2025 and will reach 50 by the end of 2025.⁶

1.4 SIGNIFICANT CRUDE OIL DISCOVERY

The Nigerian National Petroleum Company Limited (NNPCL) and FIRST Exploration & Petroleum Development Company Limited (FIRST E&P) Joint Venture (JV) have confirmed a significant hydrocarbon discovery in the Songhai Field, located in Oil Mining Lease 85 (OML 85) in Bayelsa State.⁷ The well encountered hydrocarbons across eight reservoirs, logging over 1,000 ft of hydrocarbon-bearing sands.

Preliminary analysis indicates substantial oil and gas volumes, reinforcing the field's commercial potential. Further evaluations, including formation testing and well-data integration, will be conducted to refine resource estimates and optimize field development plans. Currently, the JV maintains a steady daily production of about 57,000 bo/d from OML 83 and OML 85.⁸

1.5 DECARBONISATION EFFORTS

1.5.1 NUPRC unveils strategic decarbonisation drive in upstream oil & gas

NUPRC is prioritising decarbonization as both an environmental necessity and a strategic growth drive in the upstream oil and gas sector. Engr. Gbenga Komolafe ("CEO NUPRC") announced this at the Decarbonisation and Energy Sustainability Forum (DESF) held on 18 March, Abuja. He emphasised balancing climate action with Nigeria's economic realities, leveraging its hydrocarbon resources for sustainable development. Key initiatives include the National Gas Policy, National Gas Expansion Programme, and the Decade of Gas (2021–2030). NUPRC has established an Energy Sustainability and Carbon Management Department. NUPRC also launched a Decarbonisation Blueprint and Handbook, and March 18th was officially declared Upstream Decarbonisation Day.⁹

1.5.2 Upstream Petroleum Decarbonisation Template (UPDT)

NUPRC has issued the UPDT, as a mandatory component of applications for licences, permits, and approvals across upstream activities, commencing in January 2025. The UPDT mandates the integration of decarbonisation strategies/plans into upstream operations, including field development plans, wells, project/facility engineering, drilling and rig operations. Operators will be required to establish measurable and time-bound greenhouse gas reduction goals aligned with national targets. Companies are also required to demonstrate compliance with the Gas Flaring,

Venting, and Methane Emissions Regulations, 2023, and related Guidelines, to eliminate routine flaring and venting in their operations.¹⁰

In accordance with the UPDT, operators must:

1. implement methane management programmes such as leak detection and repair;
2. optimise operations using energy-efficient technologies; and
3. integrate renewable energy sources into their projects and operations.

The UPDT also stipulates the development of carbon management and monetisation initiatives, including Carbon Capture and Storage (CCS), nature-based solutions, carbon offset projects, etc. Rather than constituting a regulatory hurdle, these measures are designed to enhance Nigeria's upstream sector's environmental credentials, attract sustainable energy investments, and ensure alignment with international Environmental, Social, and Governance standards.

1.6 COMMENCEMENT OF 2025 LICENSING ROUND

The NUPRC has announced plans for the 2025 licensing round aimed at unlocking the potential of fallow assets to enhance Nigeria's energy production and natural gas development, aligning with Nigeria's commitment to the United Nations Development Goals. The CEO, NUPRC, noted that the 2025 licensing round would build on lessons learnt from the 2024 exercises¹¹.

The NUPRC will soon release the guidelines and schedules for the 2025 Licensing Round. Prospective bidders are encouraged to keep an eye on the announcements posted on the official NUPRC websites. These announcements will provide detailed information on the specific prequalifications, bid evaluations, and other licensing requirements.

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