Shell sells its Nigerian subsidiary to a consortium that includes four local firms for $2.4bn

ANGLO-Dutch petroleum giant Shell has reached an agreement to sell its Nigerian onshore subsidiary the Shell Petroleum Development Company (SDPC) to a consortium of five companies known as Renaissance.

One of Shell's biggest headaches, SPDC has created all sorts of problems for the conglomerate with its operations in the Niger Delta. Shell has been accused of polluting fishing creeks in the area and has been the subject of numerous lawsuits and of protests by community groups.

Renaissance is made up of four exploration and production companies based in Nigeria and an international energy group. It has agreed to buy SPDC for $2.4bn but Shell said the completion of the transaction is subject to approval by the Federal Government of Nigeria and several other conditions.

According to Shell, the transaction has been designed to preserve the full range of SPDC’s operating capabilities following the change of ownership. This, it said includes the technical expertise, management systems and processes that SPDC implements on behalf of all the companies in the SPDC joint venture.

SPDC's joint venture is an unincorporated joint venture comprised of SPDC (30%), the government-owned Nigerian National Petroleum Corporation (55%), Total Exploration and Production Nigeria (10%) and Nigeria Agip Oil Company (5%). SPDC’s staff will continue to be employed by the company as it transitions to new ownership.

Zoë Yujnovich, Shell’s integrated gas and upstream director, said: “Following completion, Shell will retain a role in supporting the management of SPDC joint venture facilities that supply a major portion of the feed gas to Nigeria Liquefied Natural Gas (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

“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.”