Shell announces plan to exit Nigeria, agrees to sell SPDC

The British oil giant, Shell, has agreed to sell its Nigerian onshore subsidiary, Shell Petroleum Development Company of Nigeria Limited(SPDC) to Renaissance, a consortium of five companies based in Nigeria and an international energy group, for about $2.4 billion.

The company announced this in a statement on Tuesday.

Shell said that the development will bring an end to the company’s core operation in Nigeria, years after its formation in 1979.

According to Shell, completion of the transaction is subject to approvals by the Federal Government of Nigeria, who has a 55 per cent stake and other conditions.

While explaining the implication of the development, Shell noted that the transaction had been designed to preserve the full range of SPDC’s operating capabilities following the change of ownership.

These include the technical expertise, management systems and processes that SPDC implements on behalf of all the companies in the SPDC Joint Venture (SPDC JV).

The SPDC JV is an unincorporated joint venture comprised of SPDC Ltd (30 per cent), the government-owned Nigerian National Petroleum Corporation (55 per cent), Total Exploration and Production Nigeria Ltd (10 per cent) and Nigeria Agip Oil Company Ltd (5 per cent).
The British oil giant clarified that its staff will continue to be employed by the company as it transitions to new ownership.

Shell said it retains a role in supporting the management of SPDC JV facilities that supply a major portion of the feed gas to Nigeria LNG and NLNG to help Nigeria achieve maximum value from NLNG.

The company said it will focus investment on deepwater and integrated gas operations.

“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.

“It is a significant moment for SPDC, whose people have built it into a high-quality business over many years. Now, after decades as a pioneer in Nigeria’s energy sector, SPDC will move to its next chapter under the ownership of an experienced, ambitious Nigerian-led consortium.

“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.”