Oil major Shell to sell Nigeria onshore business for up to $2.4bn
- Shell is selling its subsidiary, The Shell Petroleum Development Company of Nigeria Limited (SPDC), to a consortium of local companies for up to $2.4 billion.
- The consortium, Renaissance, includes local oil exploration and production companies and a Swiss-based trading and investment company.
- This sale signifies a major change in Shell's onshore oil and gas operations in Nigeria.
Shell is poised to conclude nearly a century of onshore oil and gas operations in Nigeria by agreeing to sell its subsidiary to Renaissance, a consortium of mostly local companies, for a sum of up to $2.4 billion.
The British major, as per its statement, will divest The Shell Petroleum Development Company of Nigeria Limited (SPDC) for $1.3 billion, and the buyers will additionally make a payment of up to $1.1 billion relating to prior receivables at completion.
The consortium, Renaissance, consists of ND Western, Aradel Energy, First E&P, and Waltersmith—all local oil exploration and production companies—and Petrolin, a Swiss-based trading and investment company. This move marks a significant shift in Shell's long-standing presence in Nigerian onshore oil and gas activities.
The British energy giant, a pioneer in Nigeria's oil and gas industry since the 1930s, has faced challenges for years, grappling with numerous onshore oil spills resulting from theft, sabotage, and operational issues. These incidents incurred substantial repair costs and led to high-profile legal battles. Since 2021, Shell has actively sought to divest its Nigerian oil and gas business, while maintaining its involvement in the more lucrative and less problematic offshore sector in Nigeria. The company's exit aligns with a broader trend of Western energy companies scaling back their presence in Nigeria, redirecting their focus towards newer and more profitable operations. Notably, Exxon Mobil, Italy's Eni, and Norway's Equinor have all recently engaged in agreements to sell off assets in the country.