Shell PLC has reached an agreement to sell its Nigerian onshore subsidiary, The Shell Petroleum Development Company of Nigeria Limited (SPDC), to Renaissance, a consortium of five companies. The transaction, subject to approvals by the Federal Government of Nigeria and other conditions, is designed to preserve SPDC's operating capabilities for the benefit of the joint venture. 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. The consideration payable to Shell as part of the transaction is US$1.3 billion, with additional cash payments of up to US$1.1 billion expected. The net book value of the entity subject to this transaction is approximately US$2.8 billion as of December 31, 2023. At closing, Shell will provide secured term loans of up to US$1.2 billion to cover a variety of funding requirements. Additionally, Shell is providing additional financing of up to US$1.3 billion over future years to fund SPDC’s share of the development of the SPDC JV’s gas resources to supply feed gas to NLNG, and its share of specific decommissioning and restoration costs.
The transaction aligns with Shell's previously announced intent to exit onshore oil production in the Niger Delta, focusing future disciplined investment in Nigeria on its Deepwater and Integrated Gas positions. Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director, stated, “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.” The SPDC JV, an unincorporated joint venture comprised of SPDC Ltd, the government-owned Nigerian National Petroleum Corporation, Total Exploration and Production Nigeria Ltd, and Nigeria Agip Oil Company Ltd, holds 15 oil mining leases for petroleum operations onshore and 3 for petroleum operations in shallow water in Nigeria. It is operated by SPDC.
Shell will remain a major investor in Nigeria’s energy sector through its Deepwater and Integrated Gas businesses, as it holds three other main businesses in Nigeria outside the scope of this transaction: Shell Nigeria Exploration and Production Company Limited (SNEPCo), Shell Nigeria Gas Limited (SNG), and Daystar Power Group. Additionally, Shell holds a 25.6% interest in NLNG, which produces and exports LNG to global markets, and this interest is also outside the scope of the transaction. The buyer, Renaissance, is formed of ND Western, Aradel Energy, First E&P, Waltersmith, and Petrolin. The transaction is a significant milestone for SPDC, as it will move to its next chapter under the ownership of an experienced, ambitious Nigerian-led consortium.