Investors push for new tender process for $243m share of pipeline project

Stakeholders are calling on the Federal Government to launch a new competitive bidding process for the sale of a 40 per cent interest in the Amukpe–Escravos Pipeline, while rejecting attempts to revive a previously terminated transaction.

n

A fresh valuation is being urged to determine the true worth of the asset, considering the potential impact on investor confidence in Nigeria’s oil and gas industry, amid growing concerns over the sale.

n

The Amukpe–Escravos Pipeline, which is jointly owned by Pan Ocean Oil Corporation and NNPC Exploration & Production Limited, has a transportation capacity of about 160,000 barrels per day and has maintained operational uptime above 95 per cent since becoming operational in 2022.

n

The pipeline, which runs from Amukpe in Delta State to the Escravos export terminal in Warri, is a strategic crude evacuation route in the western Niger Delta, with Pan Ocean Oil Corporation holding 40 per cent and NNPC Exploration & Production Limited controlling the remaining 60 per cent.

n

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, with proceeds from the disposal expected to be used to settle outstanding obligations.

n

However, the divestment process has been entangled in disputes over valuation and transaction history, with an earlier transaction involving the proposed acquisition of the 40 per cent stake, valued at about $243m, collapsing in October 2024.

n

The earlier transaction failed after the buyer allegedly failed to meet payment obligations and commercial conditions attached to the deal, and concerns later emerged that the transaction was being revisited using valuation benchmarks linked to the failed process.

n

An independent assessment conducted in 2025 reportedly valued the 40 per cent stake at between $544m and $641m, instead of $243m, resulting in a significant valuation gap that has been fuelling criticism from industry observers.

n

Industry observers have 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.

n

Jide Olatuyi, the Managing Director of Policy Management Consult Services, stated that renewed efforts to revive the failed transaction had raised broader concerns about governance, transparency, and the credibility of Nigeria’s investment environment.

n

According to Olatuyi, stakeholders are calling for a new competitive bidding process rather than attempting to revive a dead transaction, emphasizing that the issue is fundamentally about governance standards in the oil and gas sector.

n

Olatuyi dispelled thoughts that opposition to the proposed transaction was driven by sentiment or commercial rivalry, saying that 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.

n

Several stakeholders, including project lenders such as Sterling Bank and the Asset Management Corporation of Nigeria, have advocated for a transparent process that reflects current market realities and updated asset valuations, according to Olatuyi.

n

Olatuyi 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.

n

Prof. Okey Ikechukwu, a public affairs analyst and Executive Director of the Development Specs Academy, 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.

n

Ikechukwu argued that reviving the sale on the basis of disputed or outdated valuation benchmarks would undermine due process and public confidence, stating that any sale of a performing national asset must reflect its true market value.

n

The don warned that proceeding without an updated valuation process could erode investor confidence and raise concerns among lenders, saying that it might even be interpreted as sabotage.

n

Ikechukwu called for the immediate suspension of all ongoing processes connected to the proposed transaction, emphasizing that an independent evaluation should take place to determine the current value of the asset.

n

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.

n

Atuanya noted that the pipeline has demonstrated exceptional uptime and asset integrity, outperforming comparable overground pipelines in the region, with its burial depth and bypassing of traditional security hot spots serving as a significant competitive advantage for product delivery to Escravos.