LONDON, Jan 16 – Shell (SHEL.L) is wrapping up nearly a century of onshore oil and gas operations in Nigeria, with the sale of its subsidiary to a consortium of mostly local companies for up to $2.4 billion.Thank you for reading this post, don't forget to subscribe!
The British energy giant, present in Nigeria since the 1930s, has grappled with onshore oil spills due to theft, sabotage, and operational issues, resulting in costly repairs and legal challenges.
Since 2021, Shell has sought to divest its Nigerian onshore assets while maintaining a presence in the country’s more lucrative offshore sector. Shell’s departure aligns with a broader trend of western energy companies retreating from Nigeria for newer, more profitable ventures. Exxon Mobil (XOM.N), Italy’s Eni, and Norway’s Equinor (EQNR.OL) have also made deals to sell assets in Nigeria.
Shell will sell The Shell Petroleum Development Company of Nigeria Limited (SPDC) for $1.3 billion, with an additional payment of up to $1.1 billion relating to prior receivables at completion. The buyer, the Renaissance consortium, includes local oil exploration and production companies ND Western, Aradel Energy, First E&P, Waltersmith, and Swiss-based trading and investment company Petrolin.
“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,” said Shell’s head of upstream Zoë Yujnovich.
The sale, awaiting Nigerian government approval, requires the Renaissance consortium to assume responsibility for spills, theft, and sabotage. Shell, which has faced multiple lawsuits for compensation over spills in the Niger delta, emphasizes the buyer’s commitment to addressing environmental issues.
Nnimmo Bassey, Executive Director of Nigerian advocacy group Health of Mother Earth Foundation, demands that Shell takes full responsibility, including payment for remediation and reparations to host communities.
Shell’s exit leaves SPDC Limited as the operator of the joint venture holding 18 onshore and shallow water mining leases, with partners including the state’s Nigerian National Petroleum Corporation (NNPC), TotalEnergies (TTEF.PA), and Italy’s Eni (ENI.MI). Despite onshore withdrawal, Shell retains operations in deep offshore fields, a liquefied natural gas plant, and other assets in Nigeria. SPDC, established in 1979, has endured as an operator since its formation, with current partners entering at later stages.