Shell Plc has agreed to sell its Nigerian onshore oil and gas subsidiary, the Shell Petroleum Development Company of Nigeria Limited (SPDC) to a local consortium for over $1.3 billion, pending government approval.
Shell’s Integrated Gas and Upstream Director, Zoe Yujnovich, confirmed this in a statement on Tuesday.
Shell aims to divest the SPDC for $1.3 billion, with additional payments of up to $1.1 billion, according to the official announcement.
SPDC Limited, which operates with a 30% stake in the SPDC joint venture holding 18 onshore and shallow water mining leases, will continue to be the operator. Other joint venture partners include the Nigerian National Petroleum Corporation (55%), TotalEnergies (10%), and Italy’s Eni (5%).
Despite exiting onshore operations, Shell retains its liquefied natural gas plant and other assets in Nigeria.
The deal, announced on Tuesday, marks a major exit for Shell from a region plagued by spills, theft, and operational challenges.
It aligns with the company’s strategic shift towards deepwater and integrated gas projects in Nigeria.
Shell’s statement: “This agreement marks an important milestone for Shell in Nigeria,” says Zoe Yujnovich, integrated gas and upstream director. “It simplifies our portfolio and focuses future disciplined investment in Nigeria on our deepwater and integrated gas positions.”
The buyer, Renaissance, is a consortium comprising ND Western, Aradel Energy, First E&P, Waltersmith, and Petrolin.
Actively involved in Nigeria since the 1930s, Shell has faced numerous challenges, including hundreds of oil spills resulting from theft, sabotage, and operational issues. Seeking to divest its Nigerian oil and gas business since 2021.
Former CEO Ben van Beurden cited a surge in sabotage, resulting in near-lawlessness beyond the company’s control. The stake drew interest from local producers such as ND Western, Heirs Oil and Gas Ltd., Seplat Energy Plc, and Sahara Group Ltd.
After a pause in the divestment process in 2022, 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.
This venture involved Eni SpA, TotalEnergies SE, and the Nigerian National Petroleum Co. Ltd. The pause was prompted by a lawsuit at Nigeria’s Supreme Court, with a lower court instructing Shell not to sell assets before resolving a dispute with a Niger Delta community over alleged pollution.
With President Bola Ahmed Tinubu’s new administration, which began in May, advisers recommended closing outstanding divestments sought by international oil producers to enhance petroleum output.
This move aligns with the government’s strategy to address challenges in the oil sector and foster increased production