Shell To Exit Nigeria's Troubled Onshore Oil After Nearly A Century

Shell announces the sale of its onshore subsidiary and stops exploring for oil in Nigeria

In addition to revealing its plan to sell The Shell Petroleum Development Company of Nigeria Limited, its onshore subsidiary, to Renaissance, Shell has announced its departure from oil exploration in Nigeria.

The five entities that make up the consortium of newly appointed custodians of the exploration subsidiary are an international energy group and four Nigerian-based indigenous exploration and production companies. This calculated action was announced in a formal statement that was posted on the business website and issued on Tuesday in London.

The press release emphasized that the sale is subject to meeting additional requirements set forth by governmental and market regulators, as well as receiving approvals from the federal government.

Notably, SPDC's operational capabilities will be preserved after the ownership transition thanks to the terms of the sale. This involves keeping the SPDC Joint Venture's management systems, procedures, and technical know-how in place. Notably, SPDC's current employees will remain on the job during this transitional period.

Shell has pledged to continue providing support by continuing to supervise the management of SPDC JV facilities. This guarantees Nigeria LNG will always have feed gas available, demonstrating Shell's commitment to helping Nigeria meet its energy needs.

The company's statement confirmed, “SPDC's staff will continue to be employed by the company as it transitions to new ownership. Following completion, Shell will retain a role in supporting the management of SPDC JV facilities that supply a major portion of the feed gas to Nigeria LNG (NLNG), to help Nigeria achieve maximum value from NLNG.”

The emphasis of investments will move to Deepwater and Integrated Gas positions as part of Shell's strategic realignment, signaling a break from onshore oil production in the Niger Delta. The integrated Gas and Upstream Director of Shell, Zoe Yujnovich, emphasized the importance of this choice for Shell's activities in Nigeria. As it moves forward into the next phase of its operations under the direction of a competent consortium led by Nigeria, Yujnovich believes that this agreement represents a turning point for SPDC, a longstanding player in the country's energy sector.

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For SPDC, whose employees have spent many years transforming it into a top-tier company, this is a momentous occasion. After decades of leading the way in Nigeria's energy industry, SPDC is about to embark on a new chapter under the direction of a capable and driven group led by Nigerians, according to Mr. Yujnovich. “Shell believes that Nigeria has a promising future and that its energy sector will attract foreign investment. In areas that are consistent with our strategy, we will keep assisting the nation in meeting its expanding energy needs and export goals.”