Shell To Sell its Onshore Oil Business in Nigeria
Shell will exit Nigeria’s onshore oil and gas after agreeing to sell its onshore assets in the largest African OPEC producer, the UK-based supermajor said on Tuesday, adding that it would remain a major investor in Nigeria’s energy sector through its deepwater and Integrated Gas businesses.
Shell has reached an agreement to sell its Nigerian onshore subsidiary, The Shell Petroleum Development Company of Nigeria Limited (SPDC), to Renaissance, a consortium of five companies—four exploration and production companies based in Nigeria and an international energy group— for US$1.3 billion.
The buyer will also make additional cash payments to Shell of up to US$1.1 billion, primarily relating to prior receivables and cash balances in the business, with the majority expected to be paid at completion of the deal, the supermajor said in a statement.
Completion of the transaction is subject to approvals by Nigeria’s federal government and other conditions.
“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” said Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director.
“Shell sees a bright future in Nigeria with a positive investment outlook for its energy sector. We will continue to support the country’s growing energy needs and export ambitions in areas aligned with our strategy,” Yujnovich added.
Shell has struggled with its onshore business in Nigeria for years, and has had its fair share of troubles there, including several lawsuits from local communities in recent years over oil spills. The supermajor denies responsibility for those spills and says that oil theft and criminality are major sources of pollution. Theft is the cause of the majority of spills in the latest claims from communities that were allowed to proceed by the High Court in London at the end of last year, according to Shell.
By Charles Kennedy for Oilprice.com