Experts say CBN’s Directive on IOCs’ Export Earnings will Increase Upstream Investments

Financial and energy sector experts have welcomed the Central Bank of Nigeria’s (CBN) recent directive allowing International Oil Companies (IOCs) full access to their export earnings, describing it as a critical step toward revitalising investment in Nigeria’s upstream petroleum sector.

This is according to 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.

The analysts say the policy enhances liquidity, operational efficiency, and investor confidence in the nation’s oil and gas industry.

The move comes amid ongoing efforts by the CBN to reform the foreign exchange (FX) market and align regulatory policy with sector realities.

What the report is saying

According to the experts, the policy shift signals a major milestone in Nigeria’s FX regulatory framework.

• “For the Nigerian economy, the development reinforces ongoing efforts to deepen the FX market, strengthen investor confidence and position Nigeria as a competitive destination for upstream oil and gas investment.” 
• “For IOCs and investors, the restoration of full access to export proceeds enhances liquidity management, improves cash flow predictability and supports more efficient capital allocation decisions within global portfolios,” the report noted.

The directive allows IOCs to retain 100 per cent of their export proceeds.

• The reform reflects the broader evolution of Nigeria’s FX reform programme, designed to improve liquidity management and operational planning for upstream oil and gas firms.

The policy is expected to mitigate historical constraints on cash flow and foreign currency access that have previously discouraged large-scale upstream investments.

Backstory

In March, the CBN approved the full repatriation of export proceeds by International Oil Companies (IOCs), allowing them to access 100% of their foreign exchange earnings through authorised dealer banks.

The directive was contained in a circular issued by the apex bank’s Trade and Exchange Department, signalling a further shift towards foreign exchange market liberalisation.

More Insights

Industry experts emphasise that the policy could transform operational and investment dynamics across Nigeria’s petroleum sector.

• Improved access to export earnings will enhance cash flow predictability and facilitate better capital allocation within global portfolios.
• Firms, the report noted, can plan and deploy resources more efficiently, reducing uncertainties that have historically slowed investment decisions.
• By deepening the FX market and stabilising the naira, the reform supports broader economic objectives and investor confidence, the analysts said.

Analysts further noted that the reform positions Nigeria more competitively against other oil-producing nations, particularly amid shifting global capital flows and energy transition pressures.

• Between 2024 and 2026, CBN reforms have progressively aligned policy with operational realities in the upstream segment.
• Restoring full access to export proceeds is expected to attract renewed interest from both existing operators and prospective investors.
• The policy could unlock fresh capital inflows, supporting production growth and reinforcing Nigeria’s position as a leading oil exporter.

What you should know

Over two years ago, the CBN stopped international oil companies (IOCs) operating in Nigeria from immediately remitting 100% of their forex proceeds to their parent company abroad.

According to the guidelines, then, IOCs would be allowed to repatriate only 50% of their proceeds immediately, while the other 50% will be repatriated 90 days from the day of inflow.