Shell has declared its withdrawal from oil exploration activities in Nigeria, disclosing its plan to divest its onshore subsidiary, The Shell Petroleum Development Company of Nigeria Limited, to Renaissance.
The recently appointed caretakers of the exploration subsidiary form a consortium consisting of four indigenous exploration and production companies based in Nigeria and an international energy group.
This strategic decision was officially communicated through a statement released in London on Tuesday, which is available on the company’s website.
The press release underscores that the sale is subject to approvals from the Federal Government, along with meeting other conditions set by governmental and market regulators.
Importantly, the terms of the sale are designed to maintain the operational capabilities of SPDC following the ownership transition. This includes retaining technical expertise, management systems, and processes within the SPDC Joint Venture, with the existing workforce continuing employment during this transitional phase.
As a commitment to ongoing support, Shell will retain a role in overseeing the management of SPDC JV facilities, ensuring the uninterrupted supply of feed gas to Nigeria LNG, underscoring Shell’s dedication to meeting Nigeria’s energy needs.
The company’s statement affirms, “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.”
As part of Shell’s strategic realignment, the focus of investments will shift towards Deepwater and Integrated Gas positions, signifying a departure from onshore oil production in the Niger Delta.
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Zoe Yujnovich, Shell’s Integrated Gas and Upstream Director, highlighted the significance of this decision for Shell’s operations in Nigeria. According to Yujnovich, this agreement marks a pivotal moment for SPDC, a longstanding participant in Nigeria’s energy sector, as it embarks on the next phase under the stewardship of a capable Nigerian-led consortium.
“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,” Mr Yujnovich said. “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.”