Shell’s Big Sale: Onshore Assets in Nigeria Nab $1.3 Billion
Shell Plc has made an announcement regarding the sale of its onshore oil assets in Nigeria for a sum exceeding $1.3 billion to a consortium of local companies. The company has decided to divest its Nigerian subsidiary, Shell Petroleum Development Company of Nigeria Limited (SPDC), as part of the agreement, which also includes the potential for an additional $1.1 billion payment related to prior receivables at completion.
The consortium known as Renaissance, consisting of ND Western, Aradel Energy, First Exploration & Production (E&P), Waltersmith, and Petrolin, will acquire the assets. However, the finalization of this transaction is contingent on approvals by the Federal Government of Nigeria and other conditions.
Following the completion of the sale, Shell intends to maintain a substantial presence in Nigeria’s energy sector through its deepwater and integrated gas businesses. The company plans to continue its involvement in the management of SPDC JV facilities to ensure a significant portion of the feed gas supply to Nigeria LNG (NLNG).
The SPDC JV is jointly owned by SPDC Ltd, the Nigerian National Petroleum Company Limited, Total Exploration and Production Nigeria Ltd, and Nigeria Agip Oil Company Ltd.
As part of the deal, Shell will receive a consideration of $1.3 billion, with the potential for up to an additional $1.1 billion in cash payments related to prior receivables and cash balances in the business, the majority of which is expected to be paid upon completion of the transaction.
It is important to note that three other key businesses in Nigeria, namely Shell Nigeria Exploration and Production Company Limited (SNEPCo), Shell Nigeria Gas Limited (SNG), and Daystar Power Group, are not included in this transaction.
The decision by Shell to divest from onshore exploration aligns with similar moves made by other international oil companies, including ExxonMobil, TotalEnergies, Oando, and Equinor, to sell their respective interests in Nigerian oil ventures. These decisions mark a significant shift in the country’s oil industry, with local companies increasingly taking charge of onshore oilfields.
The sale of onshore assets to local companies holds promise for the future of Nigeria’s oil industry. As stakeholders await government approvals, the completion of this major transaction is poised to have a lasting impact on the nation’s energy landscape.
