After almost a century of operations in Nigeria, British energy giant Shell has decided to sell its Nigerian onshore oil and gas unit for up to $2.4 billion to a group of five primarily local businesses.
Operating in the nation of West Africa since the 1930s, Shell has endured years of hardship due to hundreds of oil spills at its onshore facilities, which resulted in expensive repairs and high-profile legal actions due to theft, sabotage, and operational problems.
Since 2021, it has attempted to sell its oil and gas company in Nigeria; nevertheless, it will continue to operate in the country’s more profitable and less problematic offshore market.
Shell would achieve its long-term objective of removing itself from a difficult operating environment in the Niger Delta if the agreement is approved by the government.
In a statement, Shell stated that it will sell The Shell Petroleum Development Company of Nigeria Limited (SPDC) for a consideration of $1.3 billion, with the purchasers to pay an additional amount at closing of up to $1.1 billion for previous receivables.
The renaissance is made up of the local oil exploration and production firms ND Western, Aradel Energy, First E&P, Waltersmith as well as the trading and investment firm Petrolin, headquartered in Switzerland.
18 onshore and shallow sea mining leases are held by the SPDC joint venture, in which Shell’s SPDC Limited runs and owns a 30% interest.
SPDC will continue to be the operator.
The Nigerian National Petroleum Corporation (NNPC) of the state, which owns 55% of the venture, TotalEnergies (TTEF.PA), which owns 10%, and Eni (ENI.MI), an Italian company, which owns 5%, are the other partners.
In addition to its activities and holdings in many deep offshore areas, Shell maintains a liquefied natural gas facility as well as other assets in Nigeria.
Ozioma Samuel-Ugwuezi
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