Shell Plc has reached an agreement to sell its Nigerian onshore oil assets to a local consortium for over $1.3 billion, pending government approval.
The purchasing consortium which the pact was sealed with comprised Renaissance, ND Western, Aradel Energy, First E&P, Waltersmith, and Petrolin.
The company’s Integrated Gas and Upstream Director, Zoe Yujnovich, confirmed this in a statement on Tuesday, where he highlighted the significance of the deal and stressed the company’s focus on streamlining its portfolio and directing disciplined investments towards deep water and integrated gas ventures in the country.
The international oil company’s (IOC’s) latest move aligns with its strategic objective to reduce its stake in the increasing challenging operating environment in the Niger Delta region.
According to the Director, apart from the initial sum, the oil company anticipates to receive extra payments of up to $1.1 billion.
It would be recalled that in 2021, the company unveiled its plans to divest its Nigerian onshore assets due to the incompatibility of its long-term energy transition strategy with the challenges of operations in Nigeria, characterized by incessant oil thefts and damages of its infrastructure with the attendant results of oil spills.
The former CEO of Shell, Ben van Beurden, specifically cited a surge in sabotage, resulting in near-lawlessness beyond the company’s control.
Some local oil operators such as ND Western, Heirs Oil and Gas Ltd., Seplat Energy Plc, and Sahara Group Limited expressed their interest to acquire the assets but the deal could not real go far due to some legal suits challenging the deal.
However, after the discussions were halted in 2022, the company reopened parley with Eni SpA, TotalEnergies SE, and the Nigerian National Petroleum Company Limited (NNPCL) on the divestment process 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.
