In a historic move, British energy giant Shell has inked a deal to divest its Nigerian onshore oil and gas subsidiary to a dynamic consortium of five primarily local companies for a staggering $2.4 billion. After nearly a century of operations in Nigeria, Shell navigates a strategic shift, selling The Shell Petroleum Development Company of Nigeria Limited (SPDC) for $1.3 billion, with an additional $1.1 billion tied to prior receivables.
Having etched its presence in Nigeria since the 1930s, Shell faced challenges with numerous onshore oil spills, a consequence of theft, sabotage, and operational hurdles. These issues culminated in costly repairs and high-profile legal battles. The decision to sell the onshore assets, initiated in 2021, reflects Shell's commitment to redirect its focus to Nigeria's more lucrative and less problematic offshore sector.
The consortium, known as Renaissance, is a blend of local oil exploration and production powerhouses – ND Western, Aradel Energy, First E&P, Waltersmith – along with Petrolin, a Swiss-based trading and investment company. Despite the transition in ownership, SPDC will continue as the operator, retaining its crucial role in the SPDC joint venture that controls 18 onshore and shallow water mining leases.
This transformative deal positions Shell to concentrate on its deep offshore operations and stakes, including a significant liquefied natural gas plant and other assets in Nigeria. The landscape of Nigeria's energy sector undergoes a profound shift as Shell reshapes its strategic footprint in the region.