Shell to Divest Nigerian Onshore Assets for $2.4 Billion, Ending 88-Year Presence

Shell Plc has reached an agreement to sell its Nigerian onshore oil and gas subsidiary, the Shell Petroleum Development Company of Nigeria Limited (SPDC), to the Renaissance consortium for a total of $2.4 billion. This marks the conclusion of Shell’s operations in Nigeria after nearly a century.

The sale involves the divestment of SPDC for $1.3 billion, with additional payments of up to $1.1 billion. Aradel Holdings Plc, a leading indigenous energy company in Nigeria, has acquired an equity interest in the divested SPDC assets through Aradel Energy Limited.

Renaissance, the consortium behind the acquisition, consists of ND Western Limited, Aradel Energy Limited, the Petrolin Group, FIRST Exploration and Petroleum Development Company Limited, and the Waltersmith Group.

Aradel sees this acquisition as a significant milestone that will bring substantial benefits to its shareholders, enhance its financial outlook, and strengthen its strategic position in the Nigerian energy market.

Despite the divestment from onshore operations, SPDC Limited will retain its role as the operator with a 30% stake in the SPDC joint venture, which holds 18 onshore and shallow water mining leases. Other joint venture partners include the Nigerian National Petroleum Corporation (55%), TotalEnergies (10%), and Italy’s Eni (5%). Shell will maintain its liquefied natural gas plant and other assets in Nigeria.

The completion of the deal is subject to meeting conditions precedent and approvals from the Federal Government of Nigeria. Aradel commits to collaborating with stakeholders to ensure a smooth transition and drive continued growth in Nigeria.

Shell’s Integrated Gas and Upstream Director, ZoĆ« Yujnovich, stated that the divestment aligns with the company’s strategy of focusing on disciplined investment in Nigeria’s deepwater and Integrated Gas positions, helping to simplify its portfolio.

The transaction is designed to preserve SPDC’s operating capabilities, including technical expertise, management systems, and processes. 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).

The deal underscores the federal government’s commitment to exceeding its 2024 oil production target, as highlighted by the Minister of State for Petroleum Resources, Heineken Lokpobiri. Nigeria aims to reach and surpass the 2024 crude oil production budget target of 1.7 million barrels per day.

Completion of the transaction is contingent on approvals from the Federal Government of Nigeria and other conditions. The move reflects Shell’s strategic shift and contributes to Nigeria’s ongoing efforts to boost oil production and attract investments in the sector.

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