Shell has announced that it has reached an agreement to sell its Nigerian onshore subsidiary, Shell Petroleum Development Company of Nigeria Limited (SPDC), to Renaissance, a consortium made of five companies including four exploration and production companies based in Nigeria and an international energy group for up to $2.4 billion.
The completion of this transaction is subject to approvals by the Federal Government of Nigeria and other conditions.
The transaction aims to preserve the full range of SPDC’s operating capabilities following the change of ownership. This includes the technical expertise, management systems and processes that SPDC implements on behalf of all the companies in the SPDC Joint Venture (SPDC JV). SPDC’s staff will continue to be employed by the company as it transitions to new ownership.
Though Shell will continue to play a role in supporting the management of SPDC JV facilities which supply a major portion of the feed gas to Nigeria LNG (NLNG), crucial for helping Nigeria achieve maximum value from NLNG.
According to Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director, this agreement is a significant milestone for the company in Nigeria. It aligns with their previously announced intent to exit onshore oil production in the Niger Delta, simplifying their portfolio and focusing future disciplined investment in Nigeria on their Deepwater and Integrated Gas positions.
Yujnovich also expressed her confidence in the future of Nigeria’s energy sector, stating that Shell sees a bright future in the country with a positive investment outlook. They will continue to support the country’s growing energy needs and export ambitions in areas that align with their strategy.
Besides its operations and stakes in several fields deep offshore, Shell also has a liquefied natural gas plant and other assets in Nigeria.
Shell’s subsidiary, SPDC Limited, operates and holds a 30% stake in the SPDC joint venture, which holds 18 onshore and shallow water mining leases. By 2022, Shell’s resources in SPDC reached around 458 million barrels of oil equivalent (MMBoe). Other partners in the joint venture include the state-owned Nigerian National Petroleum Corporation (NNPC) with a 55% stake, TotalEnergies with 10%, and Italy’s Eni with 5%.
Notably, SPDC, which remains the operator, was formed in 1979, incorporating assets of the older Shell-BP consortium, with its current partners entering at later stages.
