Shell to exit oil exploration in Nigeria after deal to sell SPDC

Business a.m

Shell has announced its decision to exit the Nigerian oil exploration industry by divesting its onshore Nigerian oil  assets at Shell Petroleum Development Company of Nigeria Limited (SPDC) to Renaissance, a consortium of five entities for a consideration of $1.3 billion, with buyers making an an additional payment of up to $1.1 billion relating to prior receivables at completion.

The company communicated the announcement through a press release, which was released in London and made available on its website.

While the announcement of the divestment of Shell’s Nigerian onshore operations to Renaissance is significant, the completion of the transaction is still contingent on a number of factors. One of the key requirements is the approval of the federal government of Nigeria, as well as other regulatory bodies and stakeholders. 

Notably,the deal has been structured to ensure that SPDC’s full spectrum of operational capabilities will be maintained following the change in ownership. This includes technical expertise, management systems, and processes that SPDC currently employs as part of the SPDC Joint Venture (SPDC JV). In addition, staff employed by SPDC will continue to be part of the company during the transition period. 

As part of the deal, Shell will continue to play a role in supporting the management of the SPDC JV facilities that supply feed gas to Nigeria LNG (NLNG). 

Commenting on the deal, Zoë Yujnovich, Shell’s integrated gas and upstream director, said, “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.”

Yujnovich also noted that Shell sees a promising future in Nigeria with a positive investment outlook for its energy sector and plans to continue supporting the country’s growing energy needs and export ambitions in areas aligned with its strategy.