Shell has confirmed its decision to divest from Nigeria’s onshore oil and gas sector, reaching an agreement to sell its onshore assets in the country, as announced on Tuesday. The UK-based supermajor emphasized its commitment to remaining a significant investor in Nigeria’s energy sector, focusing on deepwater and Integrated Gas businesses.
The sale involves Shell’s Nigerian onshore subsidiary, The Shell Petroleum Development Company of Nigeria Limited (SPDC), which will be sold to Renaissance, a consortium consisting of four Nigerian exploration and production companies and an international energy group. The transaction is valued at US$1.3 billion, with additional cash payments of up to US$1.1 billion to Shell, primarily related to prior receivables and cash balances in the business. The majority of these payments are expected upon completion of the deal, pending approvals from Nigeria’s federal government and meeting other conditions.
Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director, highlighted the significance of the agreement, stating, “This agreement marks an important milestone for Shell in Nigeria, aligning with our previously announced intent to exit onshore oil production in the Niger Delta, simplifying our portfolio and focusing future disciplined investment in Nigeria on our Deepwater and Integrated Gas positions.”
Yujnovich expressed optimism about Nigeria’s energy sector, emphasizing Shell’s commitment to supporting the country’s growing energy needs and export ambitions in alignment with their strategic focus.
Shell has faced challenges in its onshore business in Nigeria over the years, including legal disputes with local communities over oil spills. The company contends that oil theft and criminal activities are major contributors to pollution, denying responsibility for the spills. The divestment from onshore assets reflects Shell’s strategic decision to streamline its portfolio and concentrate on more promising areas within Nigeria’s energy landscape.
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