Shell Exits Oil Exploration In Nigeria, Sales Subsidiary To Local Firm At $1.3billion
Renaissance Africa Energy has reached a groundbreaking agreement with Shell to acquire its entire shareholding in The Shell Petroleum Development Company of Nigeria Limited (SPDC).
Renaissance is a consortium consisting of ND Western Limited, Aradel Holdings Plc, the Petrolin Group, FIRST Exploration and Petroleum Development Company Limited, and the Waltersmith Group.
Shell shared a post confirming the acquisition which is subject to approval by the Nigerian authorities.
Confirming the withdrawal from oil exploration in Nigeria, in a post shared on its verified X (formerly known as Twitter) account, Shell said the sale was contingent upon obtaining approvals from the Federal Government, in addition to meeting other conditions stipulated by governmental and market regulators.
According to the company in a statement on Tuesday, it said it would sell its Nigerian subsidiary, Shell Petroleum Development Company of Nigeria Limited (SPDC), for a consideration of $1.3 billion, with buyers making an additional payment of up to $1.1 billion relating to prior receivables at completion.
Shell explained that the terms of the sale had been crafted to preserve SPDC’s operational capabilities following the ownership transition. “This includes the retention of technical expertise, management systems, and processes within the SPDC Joint Venture. Notably, the existing workforce at SPDC will continue employment during this transitional phase,” the statement noted.
The oil giant said it would maintain a role in overseeing the management of SPDC JV facilities. This ensures the uninterrupted supply of feed gas to Nigeria LNG, underlining Shell’s dedication to facilitating Nigeria’s energy requirements.
“SPDC’s staff will continue to be employed by the company as it transitions to new ownership. Following completion, Shell will retain a role in supporting the management of SPDC JV facilities that supply a major portion of the feed gas to Nigeria LNG (NLNG), to help Nigeria achieve maximum value from NLNG,” it added.
As part of Shell’s strategic realignment, the focus of investments will shift towards Deepwater and Integrated Gas positions, indicating a departure from onshore oil production in the Niger Delta.
Zoe Yujnovich, Shell’s Integrated Gas and Upstream Director, highlighted the significance of this decision for Shell’s operations in Nigeria. According to Yujnovich, this agreement marks a pivotal moment for SPDC, a longstanding participant in Nigeria’s energy sector, as it embarks on the next phase under the stewardship of a capable Nigerian-led consortium.
“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.
“It is a significant moment for SPDC, whose people have built it into a high-quality business over many years. Now, after decades as a pioneer in Nigeria’s energy sector, SPDC will move to its next chapter under the ownership of an experienced, ambitious Nigerian-led consortium,” Mr Yujnovich said.
“Shell sees a bright future in Nigeria with a positive investment outlook for its energy sector. We will continue to support the country’s growing energy needs and export ambitions in areas aligned with our strategy.”