Shell Plc has officially announced an agreement to sell its onshore oil assets in Nigeria to a local consortium for a sum exceeding $1.3 billion, pending government approval.
Zoe Yujnovich, Shell’s Integrated Gas and Upstream Director, confirmed the deal’s significance in a statement on Tuesday, highlighting the company’s strategic focus on optimizing its portfolio and directing disciplined investments toward deepwater and integrated gas ventures in Nigeria.
This move is in line with Shell’s broader objective to exit the challenging operating environment in the Niger Delta region. Alongside the initial sum, Shell expects to receive additional payments of up to $1.1 billion. The purchasing consortium, named Renaissance, includes ND Western, Aradel Energy, First E&P, Waltersmith, and Petrolin.
The decision to divest the Nigerian onshore assets was announced by Shell in 2021, citing the incompatibility of its long-term energy transition strategy with the operational challenges in Nigeria, including issues like theft and oil spills. Former CEO Ben van Beurden mentioned a surge in sabotage, leading to near-lawlessness beyond the company’s control. Local producers such as ND Western, Heirs Oil and Gas Ltd, Seplat Energy Plc, and Sahara Group Ltd showed interest in acquiring the stake.
After a temporary halt in the divestment process in 2022 due to a lawsuit at Nigeria’s Supreme Court, Shell resumed talks in June 2023 to sell its 30% interest in the joint venture known as SPDC, operating onshore and in shallow-water oil and gas fields. The venture involved Eni SpA, TotalEnergies SE, and the Nigerian National Petroleum Co. Ltd. The pause was prompted by a lower court instructing Shell not to sell assets before resolving a dispute with a Niger Delta community over alleged pollution.
The recent decision to resume and conclude the divestment aligns with President Bola Tinubu’s new administration, which began in May.
Advisers recommended closing outstanding divestments sought by international oil producers to enhance petroleum output, in line with the government’s strategy to address challenges in the oil sector and foster increased production.
