Shell, the British energy giant, is poised to conclude nearly a century of onshore oil and gas operations in Nigeria by selling its subsidiary to a consortium of five predominantly local companies for a sum of up to USD 2.4 billion. Pioneering Nigeria’s oil and gas industry since the 1930s, Shell has grappled with persistent challenges, including onshore oil spills attributed to theft, sabotage, and operational issues, leading to extensive repairs and high-profile legal battles.
Having initiated efforts to sell its Nigerian oil and gas business in 2021, Shell emphasizes its commitment to remaining active in Nigeria’s more lucrative and less problematic offshore sector. This strategic move aligns with a broader trend of Western energy companies, including Exxon Mobil, Italy’s Eni, and Norway’s Equinor, divesting assets in Nigeria to concentrate on newer, more profitable ventures.
In an official statement, Shell announced the sale of The Shell Petroleum Development Company of Nigeria Limited (SPDC) for USD 1.3 billion, with the buyers committing an additional payment of up to USD 1.1 billion related to prior receivables at completion. Zoe Yujnovich, Shell’s Head of Upstream, described the agreement as a crucial milestone, emphasizing the company’s intent to exit onshore oil production in the Niger Delta, streamline its portfolio, and channel disciplined investment toward Deepwater and Integrated Gas positions in Nigeria.
The consortium of buyers, known as Renaissance, comprises local oil exploration and production companies ND Western, Aradel Energy, First E&P, Waltersmith, and Swiss-based trading and investment company Petrolin. The successful completion of the sale is contingent upon approval from the Nigerian government.
Taking over responsibility for spills, theft, and sabotage, Renaissance addresses Shell’s historical challenges, including multiple lawsuits seeking compensation for environmental damage caused by spills in the Niger Delta. Nnimmo Bassey, Executive Director of the Nigerian advocacy group Health of Mother Earth Foundation, insists that Shell must fully acknowledge its responsibility, calling for payment for remediation, restoration of polluted areas, and reparations to affected host communities.
While Shell retains its liquefied natural gas plant and other assets in Nigeria, SPDC Limited, formed in 1979, will continue as the operator with a 30% stake in the SPDC joint venture holding 18 onshore and shallow water mining leases. Partners in the joint venture include the Nigerian National Petroleum Corporation (NNPC) with a 55% stake, TotalEnergies with 10%, and Italy’s Eni with 5%.