- Shell announced its exit from the Nigerian oil exploration market in January 2024 to focus on deep offshore fields
- Shell's proposal to sell its stake in Nigerian onshore and shallow water operations to a consortium has been put on hold
- The Nigerian Upstream Petroleum Regulatory Commission stated that the proposed new owners lacked the qualifications to manage the assets
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Shell’s proposal to sell off its stake in Nigeria's onshore and shallow water operations to a consortium of some companies known as the Renaissance, has suffered a setback. According to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the deal was put on hold as the proposed new owners lacked the qualifications to manage the assets.
Recall Shell International PLC in January 2024, announced its exit from the Nigerian onshore oil market with the sale of its Nigerian onshore subsidiary, Shell Petroleum Development Company Ltd (SPDC) to focus more on profitable deep offshore fields.
In the statement released by the company, it noted its operations which included 15 oil mining leases for petroleum operations onshore and three for petroleum operations in shallow water in Nigeria would be handed over to the new owners pending completion of the deal.
“The transaction has been designed 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”.
“Following completion, Shell will retain a role in supporting the management of SPDC JV facilities that supply a major portion of the feed gas to Nigeria LNG (NLNG), to help Nigeria achieve maximum value from NLNG”. the statement added.
Shell however, added that the completion of the transaction was subject to approvals by the Federal Government of Nigeria, the oil regulators and other conditions.
The Renaissance group is a consortium of five companies comprising four exploration and production companies based in Nigeria and an international energy group - ND Western, Aradel Energy, First E&P, Waltersmith and Petrolin.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in September 2024, had debunked a report which affirmed the regulatory body had given the go-ahead for the deal to go through. NUPRC advised interested parties to ignore the report and promised to communicate its position on the transaction to the public at the appropriate time.
A recent report by Thisday has confirmed the deal will not be going through as the regulatory body has insisted the consortium does not have the capability to manage the assets.
“The report that the Shell/Renaissance happens to still be in the waiting room is not correct. The authorities have taken a decision and this decision has long been communicated to the parties involved in the deal, namely Shell and the Renaissance Group.
“So, contrary to any reports that they have whatever in the waiting room, this decision has been communicated in early August this year. The bid has been rejected, and it was rejected because the consortium did not show that they had enough capacity to manage 18 oil wells” the source who spoke with Thisday noted.
According to Reuters, SPDC currently providing the regulator with the required details to complete the approval process amid ongoing discussion with the government as part of the approval process for the sale of SPDC.
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