Communities considering legal action against the majors are likely to accelerate their efforts amid the ongoing wave of divestitures.
IOCs have been selling properties in Nigeria for about 10 years. The high costs of onshore production, in addition to safety risks and pressure on emissions, are driving the move away from Nigeria.
National companies are poised to hold more blocks than IOCs, SDN said. According to the NGO, Nigerian companies account for the exploitation of 50 blocks, while the IOCs have 53.
Seplat Energy acknowledged this week that it is in talks to buy ExxonMobil's shallow water assets in Nigeria. This could tip the balance in favor of Nigerian companies.
Calvin Laing of SDN, speaking at a webinar on a new report, expressed concern about the departure of IOCs without providing adequate remediation of environmental pollution. While there is global attention on climate change, there needs to be a "debate around these communities that have suffered decades of impact," he said.
Natural Resource Governance Institute (NRGI) consultant Tengi George-Ikoli expressed concern that companies selling assets could leave the problems behind.
"Before these IOCs start divesting, they need to make sure there is adequate funding and that they have resolved spills and legacy disputes," she said.
Leigh Day's associate lawyer, Matthew Renshaw, said that parent companies selling assets in Nigeria "cannot escape legal liability through divestment." Leigh Day has successfully fought Shell to hear Nigerian pollution claims in the English courts.
He cited the Bille case. The community is suing Shell over spills from the Nembe Creek Mainline (NCTL). The Anglo-Dutch company sold the assets to Aiteo in 2015. "The liabilities are not transferred. Shell no longer owns those assets, but the plaintiffs are still looking to clean up and repair," he said.
Hearings in Nigeria could become easier for communities, he suggested.
"Shell has used a delay tactic to withdraw [legal claims]. With divestments, there may be less appetite for such delays," Renshaw continued.
New corporate crisis
Nigerian new entrants face greater challenges in some respects than IOCs, George-Ikoli continued, particularly with regard to access to financing.
"The Nigerian government is not taking the diversification challenge seriously," she noted. "Joint ventures have access to finance where [domestic companies] will not. The government needs to address these challenges.
Chima Williams of Environmental Rights Action/Friends of the Earth Nigeria (ERA/OFEV) also expressed concern.
"Some have hailed the divestment program as bringing in local content. But all we've seen over the years are promises that have not been kept," he said.
Williams expressed concern about how Shell was conducting remediation in the Niger Delta. "If these assets are divested to domestic companies, which don't have the commercial strength of the divesting IOCs, what happens to the remediation?