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Shell to sell Nigerian onshore subsidiary SPDC
24/1/2024
Shell is selling its Nigerian onshore subsidiary after nearly a century of operations in the country. The Shell Petroleum Development Company of Nigeria Limited (SPDC) is being sold to Renaissance, a consortium of five companies comprising four E&P companies based in Nigeria (ND Western, Aradel Energy, First E&P and Waltersmith) and international energy group Petrolin, in a deal valued at some $2.8bn.
SPDC’s staff will continue to be employed by the company as it transitions to new ownership. 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 that comprises SPDC (30%), the government owned Nigerian National Petroleum Corporation (55%), Total Exploration and Production Nigeria (10%) and Nigeria Agip Oil Company (5%).
The SPDC joint venture holds 15 oil mining leases for petroleum operations onshore and three in the shallow waters of the Niger Delta. Some 458mn boe of proven reserves are covered by the deal.
Following completion, Shell will continue to retain a role in supporting the management of SPDC joint venture facilities that supply a major portion of the feed gas to Nigeria LNG (NLNG), to help Nigeria achieve maximum value from NLNG. Shell holds a 25.6% interest in NLNG.
‘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,’ says Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director.
Shell has three other main businesses in Nigeria that are outside the scope of the announced sale:
- Shell Nigeria Exploration and Production Company Limited (SNEPCo), which produces oil and gas in the deepwater Gulf of Guinea.
- Shell Nigeria Gas Limited (SNG), which provides gas to domestic industrial and commercial customers.
- Daystar Power Group, which provides integrated solar power to commercial and industrial business across West Africa.
The deal is subject to approvals by the federal government of Nigeria and other conditions.
Commenting on the announcement, the African Energy Chamber (AEC) says that it ‘strongly urges the government to take a fast-tracked approach’ to approving the deal, adding: ‘Delaying the transaction will only impact the growth of the industry, and Nigeria stands to serve as an example of how the successful transfer of oil assets from an international major to local players can advance the industry.’
BP CEO confirmed
Meanwhile, in other business news, BP has confirmed that Murray Auchincloss has been appointed as BP CEO with immediate effect. He had been acting as interim CEO since September 2023.
