The commercial attractiveness of a $50 billion offshore investment pipeline may ultimately depend on how effectively investors can manage the risks surrounding the capital. As projects generate increasingly complex networks of contractors, subcontractors, joint ventures and intermediaries, the potential for procurement irregularities, undisclosed relationships and illicit payments also increases, according to Oyindamola Aboaba, a forensic and financial crimes expert.
In this interview, Aboaba examines the governance challenges accompanying large-scale oil and gas investment and explains why investors should trace not only the economics of a project but also the flow and beneficiaries of its capital. EXCERPTS:
Nigeria is looking to unlock up to $50 billion in new deep-water oil & gas investment. From a financial crime perspective, what risks tend to increase when large amounts of capital begin moving into a sector?
Large capital inflows create opportunity, but they also create complexity. In a sector like oil and gas, the risk does not come simply from the size of the investment, but from the number of transactions, counterparties and decision points that come with it.
That scale is already becoming visible. NUPRC says 22 major offshore projects expected between 2026 and 2030 could represent $30–50 billion in investment, following more than $57 billion in approved Field Development Plans since 2024. Those billions do not move through one transaction. They move through layers of contractors, subcontractors, joint ventures, consultants, logistics providers and other intermediaries. The more complex that ecosystem becomes, the easier it can be to obscure who is being paid, what they are being paid for and whether the price reflects genuine value. You also tend to see pressure around the points where commercial interests interact with discretion such as contract awards, licensing, procurement, project approvals and the engagement of third parties who claim they can “facilitate” access or accelerate a process. That is where risks such as bribery, conflicts of interest, procurement fraud, inflated invoices and undisclosed related-party transactions can emerge. So, the concern is not the $50 billion itself. It is whether the governance and control environment expands at the same pace as the capital. If investment grows faster than the systems for scrutinising counterparties, monitoring transactions and detecting conflicts, the financial-crime exposure grows with it.
When an investor is assessing an oil & gas project in Nigeria, what are the red flags that should trigger deeper forensic due diligence?
One red flag rarely tells the whole story. What usually becomes interesting from a forensic perspective is when several pieces of information do not quite fit together. For example, a contractor may have very limited operating history but consistently win significant contracts. An intermediary may receive unusually high commissions without a clearly defined scope of work. Several supposedly independent bidders may share directors, addresses or other connections. You may also find unexplained related-party transactions, frequent changes in ownership before a major deal, payments to jurisdictions unrelated to the transaction, or a counterparty whose financial capacity appears inconsistent with the size of the work it is undertaking. I would also pay attention to resistance to transparency. If it is unusually difficult to establish who owns a company, why an intermediary is necessary, how a vendor was selected or how a particular fee was calculated, that itself tells you something.
None of those facts automatically means wrongdoing has occurred. But they are signals that the investor should stop relying solely on the documents presented and begin independently testing the story behind them.
How can corruption, procurement irregularities or undisclosed relationships between companies and contractors ultimately affect the economics and returns of an otherwise attractive oil & gas investment?
An investment model can look extremely attractive on paper because it assumes that the project will procure goods and services at competitive prices, execute on schedule and operate within a reasonably predictable cost structure. Financial crime attacks those assumptions.
If contracts are awarded because of relationships rather than capability or price, project costs can become inflated. If vendors are paying kickbacks, part of what appears to be a legitimate project expense may actually represent leakage. If an undisclosed related party repeatedly receives contracts, the investor may be paying above-market prices without realising it. And the consequences do not necessarily stop at the amount improperly paid. A poorly selected contractor can cause delays, operational failures or cost overruns. An investigation can hold up financing or project execution. Regulatory action can create additional costs and reputational damage. So something that begins as a governance issue can eventually become a valuation issue. Corruption does not simply take money out of a project; it can fundamentally change the economics on which the investment decision was made.
Beneficial ownership can be difficult to establish in complex transactions. What should investors be looking for to understand who is actually behind the companies, contractors or intermediaries they are dealing with?
Nigeria is not starting from zero on beneficial ownership transparency. The Companies and Allied Matters Act and the Persons with Significant Control Regulations require disclosure of individuals who ultimately own or control companies, and Nigeria now has public beneficial ownership registers. But those disclosures should be treated as a starting point, not the end of the inquiry. In complex transactions, legal ownership and actual control do not always sit in the same place. An investor therefore needs to go beyond the names on a registry and trace the ownership chain across every relevant entity.That means asking who ultimately benefits economically, who provided the capital, who exercises effective control and whether there are relationships that are not immediately visible. Investors should look at directors, shareholders, financing arrangements, common addresses, shared contact information and links between counterparties. They should also understand whether politically exposed persons, public officials or individuals connected to key decision-makers appear anywhere in that network, directly or indirectly. Ultimately, the question is not only, “Who owns this company on paper?” It is, “Who actually benefits, who has influence or control, and are there relationships here that could materially affect my investment decision?”
How much can conventional financial and commercial due diligence actually uncover, and what kinds of risks are more likely to emerge through forensic investigation?
Conventional due diligence is essential. It can tell an investor a great deal about the financial performance of a business, its assets, liabilities, contracts, market position and whether the commercial assumptions supporting the transaction make sense. But most conventional diligence begins with information that has been provided by the company or transaction parties. Forensic due diligence asks a slightly different question: how much confidence should I have in the information and relationships underlying what I have been given? That may require analysing transactions at a more granular level, testing procurement patterns, examining relationships between employees and vendors, tracing ownership, reviewing communications where appropriate, conducting enhanced background checks or comparing what people say with what the underlying data shows. That distinction is important. Commercial due diligence may help answer, business or project?” Forensic due diligence helps answer, surface that could materially change my view of this investment?”
Nigeria has had several high-profile corruption and financial crime concerns around the oil sector over the years. What lessons should investors be taking from that history as a new wave of capital comes in?
Nigeria’s oil and gas governance framework is considerably more developed today than it was during some of the sector’s more controversial periods. The Petroleum Industry Act has created a substantially different institutional framework, with transparency, accountability and the creation of a more conducive investment environment expressly built into the governance of the sector. Those reforms matter. But regulation can reduce risk; it cannot replace investor diligence.One of the clearest lessons from the sector’s history is that financial crime risk does not always end when a transaction closes. Questions around how an asset was acquired, how a licence was obtained, who participated in a transaction or whether undisclosed payments were made can resurface years later and affect investors who had nothing to do with the original conduct. That is why investors need to understand not just the current economics of an opportunity, but its history.
How did the asset move through previous owners? Have there been disputes or investigations? Can the process through which major licences and contracts were obtained withstand scrutiny? Are there legacy relationships or obligations that could create exposure Later? And I would be careful about simply pricing all of this into a broad concept of “Nigeria risk. ” That can actually hide the important distinctions between assets. The more useful approach is transaction-specific: identify where the exposure sits and investigate it.
So as this new wave of capital comes in, the lesson from the past is not that investors should stay away from Nigerian oil and gas. It is that regulatory reform and investor diligence have to work together. Stronger institutions create the framework for confidence; rigorous diligence determines whether a particular opportunity deserves that confidence.
Beyond the immediate financial loss, how can corruption and weak controls affect the bankability of Nigerian oil & gas projects and the willingness of international investors, lenders and partners to participate?
For a lender or institutional investor, the question is not simply whether an oil field can produce enough barrels to generate a return. They also need confidence that the cash flows supporting that return are predictable and that the project will not be disrupted by issues that could have been prevented through stronger governance. Weak controls introduce uncertainty. They create the possibility of cost leakage, regulatory investigations, contractual disputes, sanctions exposure, reputational damage and interruptions to project execution. For international investors, these are not only reputational concerns. Depending on the parties and transaction structure, conduct involving intermediaries or public officials can also create exposure under anti-bribery and anti-corruption laws in other jurisdictions. Once those risks become difficult to quantify, capital providers respond accordingly through additional conditions, more extensive diligence, higher risk premiums or, in some cases, by deciding that the transaction is not worth pursuing. That is why governance has an economic value. Strong controls do not merely protect a company from fraud; they can improve the credibility of its cash flows and therefore the investability of the project itself. For Nigeria, that matters because deep-water projects compete for global capital. Investors have choices. The easier we make it for them to trust the governance around a project, the stronger Nigeria’s position becomes in that competition.
If you were advising an investor looking at a Nigerian oil & gas opportunity today, what are the three things you would want to see before putting your money in?
I would want to become comfortable with three things. First, who I am actually doing business with. I would want clear beneficial ownership, credible management and partners, and transparency around intermediaries, politically exposed persons and related parties.
Second, how the project makes and spends money. That means understanding not only the projected revenues but the major contracts, procurement arrangements, historical transactions and assumptions behind capital and operating expenditure. I would want to know that the economics have not been distorted by inflated costs, conflicts or non-commercial arrangements.
Third, evidence that the controls work in practice. Policies are useful, but every sophisticated company can produce a policy document. I would want to see how vendors are actually selected, how conflicts are disclosed, how payments are approved, how concerns are investigated and what happens when someone breaches the rules.
Ultimately, before investing, I would want confidence in the people, the economics and the controls. If any one of those three is weak, I would want to understand why before committing capital.
And from the other side, what should Nigerian oil & gas companies be doing now to make themselves more credible and investable to institutional and international capital?
Companies should think about investor readiness before an investor enters the data room. That means getting the fundamentals right: clear ownership structures, transparent related-party transactions, well-documented procurement processes, credible financial records and strong controls around third parties and payments. Companies should also be able to demonstrate how they identify conflicts of interest, screen counterparties, investigate allegations and respond when something goes wrong. Importantly, this should not become a box-ticking exercise designed only for an upcoming transaction. Sophisticated investors can usually distinguish between controls that exist on paper and controls that are genuinely embedded in how a company operates.There is a significant opportunity here for Nigerian companies. International capital is looking for attractive returns, but it is also looking for confidence that those returns can be realised without unexpected governance problems destroying value along the way. In that environment, good governance is no longer simply a compliance requirement; it becomes part of the investment proposition. The companies that can demonstrate both strong assets and institutional-quality governance will be better positioned to attract and retain long-term capital
