A distinguished legal expert and corporate affairs professional, Seun Bakare speaks on Nigeria’s pressing energy challenges, the future of the oil and gas sector, and the role of law and policy in shaping this future.
With Nigeria’s long reliant on its oil and gas industry, but global attention shifting toward renewable energy, from a legal perspective, she said, “Nigeria is at a crossroads. The legal challenges associated with transitioning from an oil-based economy to a more diversified energy portfolio are vast but not insurmountable. One of the key challenges is modernizing our legal framework to encourage investment in renewable energy while ensuring that the oil and gas sector remains compliant with international standards.
“Right now, many of our laws are still heavily skewed towards the regulation of oil and gas. For instance, the Petroleum Industry Act (PIA) is a landmark piece of legislation, but we need complementary laws that incentivize investment in renewable energy projects. This could involve amendments to tax laws to provide breaks for companies developing green energy technologies, as well as new environmental laws that ensure sustainability in energy projects.”
Legal certainty is also a major issue. Investors need to know that regulations will remain stable for the long term. Without clear, consistent legal frameworks, Nigeria may struggle to attract the necessary foreign investment to finance large-scale renewable energy projects.
In terms of corporate governance, and role of legal professionals in guiding oil and gas companies through this energy transition, Seun Bakare said that Legal professionals have a crucial role to play. At the corporate level, governance is all about ensuring that companies act in the best interest of their stakeholders while complying with regulatory requirements. During an energy transition, legal advisors need to be proactive in helping companies navigate both the risks and opportunities that come with such a shift.
“First, they need to guide companies in complying with both national and international environmental regulations. For instance, there are stringent rules regarding emissions and environmental impact assessments. Companies looking to expand into renewable energy will need to adhere to these regulations while maintaining corporate governance standards. Lawyers also need to ensure that their companies remain compliant with global sustainability reporting frameworks, such as the Global Reporting Initiative (GRI) or Task Force on Climate-Related Financial Disclosures (TCFD).
“Additionally, legal advisors must help their companies navigate the complexities of renewable energy contracts, which often involve government subsidies, international partnerships, and long-term agreements. These contracts are different from the traditional oil and gas agreements, so having a legal team that understands the nuances of both industries is critical.”
The legal environment for foreign investment needs to be both secure and attractive. The Nigerian government has made some efforts in this direction, but more needs to be done to enhance investor confidence. First, we need stronger bilateral investment treaties (BITs) with countries that have expertise in renewable energy, such as Germany, China, and the United States. These treaties will provide foreign investors with guarantees that their investments will be protected and disputes will be handled fairly under international arbitration, if necessary.
In addition, laws around public-private partnerships (PPPs) should be expanded. Many renewable energy projects require significant capital expenditure, which is why PPPs are often an effective way to manage these costs. The legal framework for PPPs in Nigeria, particularly in the energy sector, needs to be clear on issues like profit-sharing, ownership rights, and dispute resolution mechanisms. This will help attract foreign direct investment (FDI) into Nigeria’s growing renewable energy market.
On the growing concern about environmental compliance within the oil sector, from her legal experience, Seun Bakare noted that the key to balancing oil exploration with sustainability is through stringent environmental regulations that are enforced consistently. Right now, we have laws like the Environmental Impact Assessment (EIA) Act, but enforcement has been an issue. To address this, we need stronger penalties for companies that fail to comply with environmental standards.
Moreover, Nigeria should adopt a more proactive approach to environmental compliance. This means not only penalizing companies after environmental damage has occurred but also providing clear guidelines on how to prevent harm in the first place. For instance, environmental audits should be required annually, and oil companies must be compelled to submit detailed reports on how they’re reducing their carbon footprint and managing waste.
“In addition, Nigeria should consider introducing carbon pricing or cap-and-trade systems. These mechanisms have been successful in other countries at reducing emissions. By putting a financial price on carbon emissions, we can encourage oil companies to adopt cleaner technologies and invest in renewable energy projects to offset their carbon footprint.”
Legal frameworks often lag behind technological advancements and Seun Bakare says emerging technologies like AI and blockchain have the potential to revolutionize the way energy is distributed and consumed, but our laws need to evolve to regulate these innovations effectively.
One area where AI is already making an impact is in energy efficiency. AI can be used to optimize energy consumption in real-time, but this raises questions about data privacy and security, especially if consumer data is being collected on a large scale. Nigerian law must address these concerns by introducing clear regulations on data usage, storage, and security in the energy sector.
Similarly, blockchain is being explored for its potential to create decentralized energy markets. This technology allows individuals to buy and sell renewable energy directly from one another, bypassing traditional energy companies. However, there’s currently no regulatory framework in Nigeria to govern these peer-to-peer energy transactions. We need to create laws that clarify the legal status of blockchain transactions in the energy market, including tax implications and consumer protections.
“My advice to Nigerian oil companies is to embrace the transition to renewable energy as an opportunity, not a threat. The world is moving toward sustainability, and those who fail to adapt will find themselves left behind. Legally, oil companies should start by conducting a thorough review of their current operations to ensure they comply with all environmental laws and regulations. This will not only protect them from future liabilities but also position them as responsible players in the energy sector.
“Furthermore, I would advise these companies to diversify their portfolios by investing in renewable energy projects, such as solar or wind farms. This requires a sound legal strategy, including securing the necessary permits, drafting contracts with suppliers, and ensuring compliance with international environmental standards. Legal teams should also work closely with government agencies to explore opportunities for public-private partnerships in the renewable energy space.
“Finally, companies need to invest in employee retraining programs. The energy transition will require a workforce with new skills, particularly in managing and maintaining renewable energy infrastructure. Legal departments should work alongside HR to ensure that contracts, labor laws, and employment policies are updated to reflect these changes.”
On the single most important legal reform needed to accelerate Nigeria’s energy transition Seun Bakare said, “if I had to choose one, I would say the introduction of a comprehensive National Energy Transition Law. This law would serve as a blueprint for how Nigeria plans to move from a fossil-fuel-based economy to a renewable-energy-driven one. It should include clear targets for reducing carbon emissions, timelines for phasing out fossil fuel subsidies, and incentives for renewable energy investments.
“The law must also address the social and economic impacts of the energy transition, ensuring that workers in the oil and gas industry are protected and retrained for jobs in the renewable sector. This kind of forward-thinking legislation will provide the legal certainty needed to attract investment, foster innovation, and ensure a just transition for all Nigerians.”
