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Shell’s $2.4 Billion Divestment Marks the End of an Era in Nigeria’s Oil Sector

Shell’s $2.4 Billion Divestment Marks the End of an Era in Nigeria’s Oil Sector

By Matthew Eloyi

In a strategic move, Shell Plc has agreed to sell its onshore oil and gas subsidiary, the Shell Petroleum Development Company of Nigeria Limited (SPDC), for a total of $2.4 billion. This significant transaction signals the conclusion of Shell’s nearly century-long operations in Nigeria, marking an exit from onshore operations that began 88 years ago.

The deal, which involves the sale of SPDC for $1.3 billion and potential additional payments of up to $1.1 billion, has garnered attention as it paves the way for a consortium known as Renaissance to take control of the assets. Aradel Holdings Plc, a leading indigenous energy company in Nigeria, has announced its acquisition through Aradel Energy Limited, solidifying its position in the nation’s energy market.

Renaissance, consisting of ND Western Limited, Aradel Energy Limited, the Petrolin Group, FIRST Exploration and Petroleum Development Company Limited, and the Waltersmith Group, brings together companies with proven operational capabilities.

Aradel’s Chief Executive Officer/Managing Director, Adegbite Falade, stated, “This successful acquisition represents a key step in our journey to becoming a leading energy company in Africa and aligns with our long-term strategic growth plans.”

Despite the divestment, SPDC Limited, with a 30% stake in the SPDC joint venture holding 18 onshore and shallow water mining leases, will continue to operate. Joint venture partners include the Nigerian National Petroleum Corporation (55%), TotalEnergies (10%), and Italy’s Eni (5%).

The divestment aligns with Shell’s broader strategy to simplify its portfolio, as stated by Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director. Yujnovich emphasized that the move would enable Shell to focus on disciplined investments in Nigeria’s deepwater and Integrated Gas positions.

The transaction, subject to approvals by the Federal Government of Nigeria and other conditions, is designed to preserve SPDC’s operating capabilities following the change of ownership. Shell will retain a role in supporting the management of SPDC JV facilities that supply a significant portion of feed gas to Nigeria LNG (NLNG).

In response to the acquisition, Aradel expressed commitment to working with stakeholders in Renaissance and the SPDC Joint Venture for a smooth transition and continued success. The divestment further aligns with the federal government’s goal to meet and exceed its 2024 oil production target, with the Minister of State for Petroleum Resources reiterating Nigeria’s determination to boost production and meet local demand.

Shell’s $2.4 Billion Divestment Marks the End of an Era in Nigeria’s Oil Sector

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