British oil major Shell said in mid-January that it had reached an agreement to sell its Nigerian onshore subsidiary, Shell Petroleum Development Company of Nigeria Limited (SPDC), to Renaissance, a consortium of five mostly local companies for up to $2.4 billion.

The consortium comprises four exploration and production companies based in Nigeria and an international energy group.

Shell has sold its Nigerian subsidiary to a local consortium for $2.4 billion, exiting onshore, prompting experts to raise environmental and legal concerns.

According to a statement released by Shell, the completion of the transaction is subject to approvals by the Federal Government of Nigeria and other conditions. Senator Heineken Lokpobiri, the Minister of State Petroleum Resources, disclosed that the Federal Government will consent to and approve the agreement reached between Shell and the consortium when it receives all the necessary documents.

Following the completion of the transaction, Shell will exit Nigeria’s onshore oil sector. Nonetheless the oil major will retain a role in supporting the management of SPDC Joint Venture facilities that supply a major portion of the feed gas to Nigeria Liquified Natural Gas (NLNG), to help Nigeria achieve maximum value from NLNG.

Sowunmi Olabode, a member of the Group of Experts on Gas at the United Nations Economic Commission for Europe (UNECE) told Gas Outlook that Shell has not been operating its own onshore assets for well over ten years. He said, “despite the fact that they’re not operating it, they refused to sell it, and there has been pressure on them to sell.”

“So, in terms of business itself, it’s not really profitable. It has nothing to do with investors pressure nor does it have anything to do with public pressure. It’s just a business decision, and it’s a business decision more on if they’re not going to operate it, they should sell it.”

For more, read: https://gasoutlook.com/analysis/shell-nigeria-divestment-raises-environmental-legal-concerns/