Financial and energy sector experts have welcomed the Central Bank of Nigeria’s (CBN) directive granting International Oil Companies (IOCs) full access to their export earnings, describing it as a pivotal move to revive investment in Nigeria’s upstream petroleum sector.
More than two years ago, the CBN restricted IOCs from immediately remitting 100% of their foreign exchange (FX) proceeds to parent companies abroad. Under the previous regime, only 50% could be repatriated instantly, while the balance was delayed by 90 days.
However, in a March circular issued by the apex bank’s Trade and Exchange Department, the CBN approved full repatriation of export proceeds, allowing IOCs to access 100% of their FX earnings through authorised dealer banks.
A report by Udo Udoma & Belo-Osagie, titled “A Strategic Reset for Nigeria’s Upstream Sector: Implications of the CBN’s 2026 Cash Pooling Reforms,” authored by Folake Elias-Adebowale and Similoluwa Ogunlela, said the policy strengthens liquidity, operational efficiency and investor confidence in the oil and gas industry.
The reform, part of broader FX market adjustments, signals a significant shift in Nigeria’s regulatory framework.
“For the Nigerian economy, the development reinforces efforts to deepen the FX market, strengthen investor confidence and position Nigeria as a competitive destination for upstream oil and gas investment,” the report stated.
It added that restoring full access to export proceeds would improve cash flow predictability and support more efficient capital allocation for IOCs operating within global portfolios.
Analysts say the policy addresses longstanding constraints on cash flow and foreign exchange access that have discouraged large-scale upstream investments. With improved liquidity and planning certainty, firms are expected to accelerate investment decisions and scale operations.
The directive is also seen as enhancing Nigeria’s competitiveness among oil-producing nations, particularly as global capital becomes more selective amid energy transition pressures.
Between 2024 and 2026, the CBN rolled out reforms aimed at aligning FX policies with industry realities. The latest move is expected to attract fresh capital inflows, boost production, and reinforce Nigeria’s standing as a leading oil exporter.
Nairametrics
