Shell to Sell Onshore Business in Nigeria’s Niger Delta for $2.4 Billion

Shell Petroleum Development Company of Nigeria (SPDC) has agreed to sell its onshore business in Nigeria’s Niger Delta to a consortium of companies for a total of $2.4 billion. The consortium, Renaissance, comprises ND Western, Aradel Energy, First E&P, Waltersmith, and Petrolin.

This divestment by Shell is part of its strategy to streamline its operations in Nigeria and focus on its deepwater and integrated gas position in the country. The deal includes 15 onshore mining leases and three shallow-water operations, majority-owned by the Nigerian National Petroleum Corporation (NNPC) with a 55% stake. Shell operates the assets and holds a 30% stake, with Total Exploration and Production Nigeria at 10% and Nigeria Agip Oil Company at 5%.

The sale agreement is subject to approval from the Nigerian government. However, activists in the Niger Delta, where Shell has faced criticism and protests over environmental damage caused by its operations, are calling for the company to address the legacy environmental and decommissioning issues before the approval is granted.

Nigeria heavily relies on the Niger Delta’s petroleum resources for its revenue. However, local communities in the region have long suffered from pollution caused by oil and gas production, affecting access to clean water, farming, and fishing. The volatile situation has been exploited by militants, who have attacked facilities and kidnapped foreign citizens. Despite government efforts to address the issues, the Niger Delta remains a complex and challenging environment for the oil industry.

As part of the deal, Shell has structured it to maintain the operational capabilities of SPDC to support the SPDC Joint Venture (SPDC JV). Shell will continue to support the management of SPDC JV facilities that supply feed gas to Nigeria LNG (NLNG), but its 25.6% interest in NLNG is not included in the transaction. Additionally, Shell’s presence in Nigeria will still be significant, with its other businesses including Shell Nigeria Exploration and Production Company, Shell Nigeria Gas, and Daystar Power Group remaining outside the scope of the sale.

Shell’s agreement to sell its onshore business in the Niger Delta marks an important milestone for the company’s operations in Nigeria. The divestment will allow Shell to focus on its deepwater and integrated gas activities while addressing concerns about environmental pollution in the region.