Shell quits Nigeria onshore after 86 years

Shell said on Tuesday that it has agreed to sell its Nigerian unit Shell Petroleum Development Company (SPDC), which operates its shallow water and onshore fields, to local consortium Renaissance for $2.4 billion.

Zoë Yujnovich, Shell’s integrated gas and upstream director, said: “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.”

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Renaissance consists of five companies, Western, Aradel Energy, First E&P, Waltersmith, all local oil exploration and production companies, and Petrolin, a Swiss-based trading and investment company.

The sale, which Renaissance confirmed, requires the approval of the Nigerian government.

Oil spills and theft

The transaction marks the conclusion of Shell’s nearly century-long operation of onshore fields in the Niger Delta.

The British energy giant, a pioneer in Nigeria’s oil and gas industry since 1938, has grappled with numerous onshore oil spills due to theft, sabotage, and operational challenges, leading to costly repairs and legal battles.

Despite its attempts to sell its Nigerian oil and gas business since 2021, Shell will retain a presence in Nigeria’s offshore sector, which is considered more profitable and less problematic.

This move aligns with the broader trend of western energy companies, such as Exxon Mobil, Eni, and Equinor, divesting assets in Nigeria to focus on newer ventures.

Shell’s sale of The Shell Petroleum Development Company of Nigeria Limited (SPDC) for $1.3 billion signifies a strategic shift, with an additional payment of up to $1.1 billion for prior receivables.

Renaissance will assume responsibility for addressing spills, theft, and sabotage, relieving Shell of these challenges as it faces multiple compensation lawsuits related to spills in the Niger Delta. Shell stated, “This agreement marks an important milestone for Shell in Nigeria.”