Shell exits Nigeria

Shell has officially announced its exit from Nigeria’s onshore oil and gas operations, marking the end of an era that spanned nearly a century.

The company has sold its subsidiary, Shell Petroleum Development Company of Nigeria Limited (SPDC), to a consortium of local companies, Renaissance Africa Energy Company Ltd (RAEC), for a staggering $2.4 billion.

“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,” Shell head of upstream Zoë Yujnovich explained, according to Reuters.

SPDC operates and has a 30 per cent stake in the SPDC joint venture that holds 18 onshore and shallow water mining leases.

Shell’s resources in SPDC reached around 458 million barrels of oil equivalent by the end of 2022.

Other partners in the joint venture are the Nigerian National Petroleum Corporation (NNPC), which holds 55 per cent, TotalEnergies (10 per cent) and Italy’s Eni (5 per cent).

Apart from its operations and stakes in several fields deep offshore, Shell still has a liquefied natural gas plant and other assets in Nigeria.

SPDC was formed in 1979, incorporating assets of the older Shell-BP consortium, with its current partners entering at later stages.

However, it’s essential to note that Shell will maintain a presence in Nigeria’s offshore oil and gas sector.

Additionally, the company will retain a 25.6% stake in Nigeria’s gas enterprise and provide financing to the new owners for cleanup and gas projects.

The exit has been met with mixed reactions, with some environmental campaigners expressing concerns that Shell is attempting to escape culpability for environmental damage and pollution caused by its operations in the Niger Delta.

Critics argue that Shell’s departure may not necessarily translate to improved environmental outcomes, as the company’s legacy of pollution and environmental degradation will continue to affect local communities.

The Nigerian government has welcomed Shell’s decision, with the Minister of State for Petroleum Resources, Timipre Sylva, stating that the sale of SPDC is a “positive development” for the country’s oil and gas sector.

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