A leading international oil company, 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 up to $2.4 billion.
The company disclosed this in a statement on Tuesday.
The development will bring an end to the British oil giant’s core operation in Nigeria years after its formation in 1979.
However, the company stated that completion of the transaction is subject to approvals by the Federal Government of Nigeria, which has a 55 percent stake, and other conditions.
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).
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Meanwhile, the statement clarified that SPDC’s staff will continue to be employed by the company as it transitions to new ownership.
The company 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.
Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director, speaking on the company’s next line of action, said it will focus investment on deep water 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.”
Report says that the SPDC JV is an unincorporated joint venture comprised of SPDC Ltd (30 percent), the government-owned Nigerian National Petroleum Corporation (55 percent), Total Exploration and Production Nigeria Ltd (10 percent), and Nigeria Agip Oil Company Ltd (5 percent).