Shell has agreed to sell its Nigerian company to a group of five primarily local businesses for up to $2.4 billion, bringing an end to nearly a century of operations in the country’s onshore oil and gas sector.
Beginning in the 1930s, the British energy giant was a pioneer in the oil and gas industry in Nigeria. Due to theft, sabotage, and operating problems, it has suffered for years with hundreds of onshore oil spills, which have resulted in expensive repairs and high-profile legal actions.
Shell has been trying to sell its Nigerian oil and gas company since 2021, although it will still be involved in the country’s more profitable and trouble-free offshore market.
Shell’s departure from Nigeria is a part of a larger retreat by Western energy giants, who are concentrating on other, more lucrative ventures. In recent years, agreements have been reached with Exxon Mobil, Norway’s Equinor, and Eni, Italy, to sell assets in the nation.
According to a statement from the British major, The Shell Petroleum Development Company of Nigeria Limited (SPDC) would be sold for a consideration of $1.3 billion. The buyers will also be required to pay an extra amount up to $1.1 billion at completion in relation to earlier receivables.
“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,” Zoë Yujnovich, Head of upstream at Shell said.
The buyer, the Renaissance consortium, is made up of Petrolin, a trade and investment firm with headquarters in Switzerland, and the local oil exploration and production firms ND Western, Aradel Energy, First E&P, and Waltersmith.
Renaissance confirmed that the Nigerian government must approve the sale.
