British energy major Shell on Tuesday announced the sale of its Nigeria onshore division SPDC for up to $2.4 billion, having already flagged its exit from the troubled Niger Delta.
The oil-rich region has long faced attacks and supply disruptions, making it a major factor driving Shell’s switch from onshore assets to offshore activities.
“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 comprising four exploration and production companies based in Nigeria and an international energy group,” it said in a statement.
“Shell will remain a major investor in Nigeria’s energy sector through its Deepwater and Integrated Gas businesses,” it added.
The consortium comprises ND Western, Aradel Energy, First E&P, Waltersmith and Petrolin.
The London-listed giant will receive an initial sum of $1.3 billion, plus extra cash payments of up to $1.1 billion at completion.
“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,” added said Zoe Yujnovich, Shell’s Integrated Gas and Upstream Director.
The divestment is also aimed at simplifying Shell’s portfolio and focusing on its offshore Nigeria business, she said.
“Shell sees a bright future in Nigeria with a positive investment outlook for its energy sector,” noted Yujnovich.
“We will continue to support the country’s growing energy needs and export ambitions in areas aligned with our strategy.”
Nigeria, Africa’s top economy and major oil producer, is seeking to attract more foreign investment since President Bola Ahmed Tinubu came to office in May 2023 with a raft of economic reforms.
Shell sees $6 billion in investment opportunities in Nigeria, especially in offshore, gas and liquefied natural gas (LNG) projects, the country’s presidency declared in December.
OPEC member Nigeria has seen its oil output decline in recent years on widespread theft from pipelines and attacks and high operating costs that deter onshore investors.
