RENAISSANCE Africa Energy has signed a landmark transaction with Shell to acquire its entire shareholding in Shell Petroleum Development Company of Nigeria Limited, SPDC.
Renaissance is a consortium consisting of ND Western Limited, Aradel Holdings Plc., Petrolin Group, FIRST Exploration and Petroleum Development Company Limited and Waltersmith Group.
The British oil giant will sell Shell Petroleum Development Company of Nigeria Limited (SPDC) for a consideration of $1.3 billion, while the buyers will make an additional payment of $1.1 billion relating to prior receivables at completion.
In a statement issued on Tuesday, January 16 Renaissance said that the acquisition marks a significant milestone for it in establishing its strategic position in the Nigerian market.
“We are committed to ensuring a smooth transition and look forward to leveraging our expertise, in partnership with SPDC’s industry-leading staff and working in partnership with all the stakeholders in the SPDC-JV to drive continued growth and success in Nigeria and beyond,” it said.
Completion of the transaction is subject to the requisite regulatory approvals.
However, information from Shell website indicated that the transaction has been designed to preserve the full range of SPDC’s operating capabilities following the change of ownership. These include the technical expertise, management systems and processes that SPDC implements on behalf of all the companies in the SPDC Joint Venture (SPDC JV).
Also, SPDC’s staff will continue to be employed by the company as it transitions to new ownership.
Following the 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.
“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” said Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director.
“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.
“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.”
Shell has sought to exit the turbulent Nigeria onshore business environment since 2021. Exxon Mobil (XOM.N), Italy’s Eni and Norway’s Equinor (EQNR.OL), who have all have struck deals to sell assets in the country in recent years. Thus, Shell will be joining other western energy companies from Nigeria as they focus on newer, more profitable operations.