In a strategic move signaling a departure from onshore oil production, Shell, the energy giant, has finalized an agreement to divest its onshore oil and gas assets in Nigeria for a total of $2.4 billion. The purchasing consortium, led by Renaissance Oil, a Nigerian independent energy company, includes ND Western, Aradel Energy, First E&P, Waltersmith, and Petrolin, marking a significant transformation in Nigeria’s oil industry landscape.
The assets being sold encompass Shell’s 49 percent stake in the SPDC Joint Venture, managing over 30 onshore oil and gas fields, along with its interests in the Forcados and Bonny export terminals. Shell reveals that the consideration for the sale of The Shell Petroleum Development Company of Nigeria Limited (SPDC) is $1.3 billion, with an additional payment of up to $1.1 billion related to prior receivables at completion.
Industry experts highlight that the deal involves approximately 95,000 barrels of oil equivalent per day (boe/d) of production, making it one of the most substantial divestments in Shell’s history. The move marks a significant shift for Shell, which has maintained operations in Nigeria for over 90 years.
The onshore assets faced operational challenges, including security concerns and environmental activism in the Niger Delta region, prompting Shell’s decision. Analysts interpret this sale as part of Shell’s broader divestment strategy, with a strategic focus on higher-margin deep-sea and liquefied natural gas (LNG) projects. The complex operating environment in Nigeria’s onshore fields and increasing pressure from climate change activism are believed to have contributed to this strategic move by Shell.