Shell Inks $1.3 bn Deal to Sell Nigerian Onshore Subsidiary

By Editor


Shell has finalized an agreement to sell its Nigerian onshore subsidiary, Shell Petroleum Development Company of Nigeria (SPDC), to Renaissance, a consortium comprising four Nigerian-based exploration and production companies and an international energy group.

The transaction, valued at US$1.3 billion, awaits approvals from the Federal Government of Nigeria and other requisite conditions.

The deal is structured to safeguard SPDC’s operational capabilities, encompassing technical expertise, management systems, and processes crucial to the SPDC Joint Venture (SPDC JV). Shell’s personnel will remain employed during the transition to new ownership.

Shell, post-transaction, will retain a role in supporting the management of SPDC JV facilities, which contribute significantly to Nigeria LNG (NLNG) feed gas supply, aiming to maximize value for Nigeria in the LNG sector.

“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,” Zoe Yujnovich, Shell’s Integrated Gas and Upstream Director, said.

The SPDC JV, an unincorporated joint venture, comprises SPDC Ltd (30 percent), Nigerian National Petroleum Corporation (55 percent), Total Exploration and Production Nigeria Ltd (10 percent), and Nigeria Agip Oil Company Ltd (5 percent).

Renaissance, the acquiring consortium, is formed by ND Western, Aradel Energy, First E&P, Waltersmith, and Petrolin.

Key financial details include the consideration payable to Shell, amounting to US$1.3 billion, with potential additional cash payments of up to US$1.1 billion, mainly linked to prior receivables and cash balances.

The net book value of the entity under transaction is approximately US$2.8 billion as of December 31, 2023. Shell will provide secured term loans of up to US$1.2 billion at closing, with an additional financing commitment of up to US$1.3 billion over future years for SPDC’s share in the development of gas resources and specific decommissioning and restoration costs.

This sale does not affect Shell’s other major businesses in Nigeria, such as Shell Nigeria Exploration and Production Company Limited (SNEPCo), Shell Nigeria Gas (SNG), and Daystar Power Group, along with its 25.6 percent interest in NLNG.

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