Shell will remain a major investor in Nigeria’s energy sector

Date:

…Agrees to Sell SPDC to Renaissance Consortium, Focusing on Deepwater and Integrated Gas Investments

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London, January 17, 2024 -Shell will remains committed to supporting Nigeria’s energy sector and will concentrate on investments in Deepwater and Integrated Gas positions, Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director, says

Meanwhile Shell announced a significant agreement to divest its Nigerian onshore subsidiary, The Shell Petroleum Development Company of Nigeria Limited (SPDC), to Renaissance, a consortium of five companies. This consortium comprises four exploration and production firms based in Nigeria and an international energy group.

The completion of this transaction is contingent on approvals from the Federal Government of Nigeria and other specified conditions.

The strategic transaction is crafted to safeguard SPDC’s operational capabilities following the change in ownership. This encompasses the technical expertise, management systems, and processes crucial for SPDC’s Joint Venture (SPDC JV) operations. Existing SPDC staff will remain employed during the transition to new ownership.

Post-completion, Shell will retain a role in supporting the management of SPDC JV facilities, contributing significantly to Nigeria LNG’s feed gas supply.

Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director, expressed, “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.”

Key Details of the Transaction:

Consideration: Shell will receive US$1.3 billion as part of the transaction.
Additional Payments: The buyer, Renaissance, will make extra cash payments of up to US$1.1 billion, mainly related to prior receivables and cash balances.
Net Book Value: The net book value of the entity subject to this transaction is approximately US$2.8 billion as of December 31, 2023.
Financing: Shell will provide secured term loans of up to US$1.2 billion at closing, covering various funding requirements.
Additional Financing: Shell commits to providing additional financing of up to US$1.3 billion over the future years for the development of SPDC JV’s gas resources and specific decommissioning and restoration costs.
The transaction signifies Shell’s strategic focus on its Deepwater and Integrated Gas businesses in Nigeria. The agreement emphasizes a commitment to supporting Nigeria’s energy needs and export ambitions aligned with Shell’s long-term strategy.

About Shell’s Other Businesses in Nigeria:

Shell Nigeria Exploration and Production Company Limited (SNEPCo): Produces oil and gas in the deepwater Gulf of Guinea.
Shell Nigeria Gas Limited (SNG): Provides gas to domestic industrial and commercial customers.
Daystar Power Group: Offers integrated solar power to commercial and industrial businesses across West Africa.
NLNG Interest: Shell holds a 25.6% interest in NLNG, which produces and exports LNG to global markets. This interest is outside the scope of the current transaction.

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