Home Business Shell agrees to sell NGN onshore subsidiary, SPDC for US$1.3bln
BusinessNewsWorld

Shell agrees to sell NGN onshore subsidiary, SPDC for US$1.3bln

309
Shell agrees to sell Nigerian onshore subsidiary, SPDC
Shell Co. Logo

The British multinational and second largest investor-owned oil and gas company, 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, which comprises of four exploration and production companies based in Nigeria and an International energy group.

The buyer, Renaissance, as an oil and gas company, is formed up of Nigerian-owned ND Western, Aradel Energy, First E&P, Waltersmith and Petrolin, being the exception as Internationally owned. Shell considers the sale of SPDC as a means for the company to focus its investment on Deepwater and Integrated gas positions.

However, following the completion of transactions, 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 while its staff will continue to be employed by the company as it transitions to new ownership.

Shell holds a 25.6% interest in NLNG, which produces and exports LNG to global markets.

Meanwhile, The SPDC JV is an unincorporated joint venture comprised of SPDC Ltd (30%), the government-owned Nigerian National Petroleum Corporation (55%), Total Exploration and Production Nigeria Ltd (10%) and Nigeria Agip Oil Company Ltd (5%).

Shell Media Releases

Shell, in its press release, stated that “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.”

While the considerable payable to Shell amounts to US$1.3bln, the potential buyer is expected to make additional cash payments to Shell of up to US$1.1bln, primarily relating to prior receivables and cash balances in the business, with the majority expected to be paid at completion of the transaction.

However, the amount above is said to be adjusted to reflect any shareholder distributions above US$200 million made prior to completion. Other contingent payments, including those related to gas supply to NLNG, may become payable depending on business performance and fluctuation of product prices.

Nonetheless, the completion of the transaction is subject to approvals by the Federal Government of Nigeria and other conditions agreeable to all stakeholders involved.

About The Author

Written by
Mayowa Durosinmi

M. Durosinmi is a West Africa Weekly investigative reporter covering Politics, Human Rights, Health, and Security in West Africa and the Sahel Region

Related Articles

FinanceNews

Court Orders Final Forfeiture of $2 Million and Properties Linked to Former CBN Governor Emefiele

The Federal High Court in Lagos has ordered the final forfeiture of...

Malnourished Minors Detained for EndBadGovernance Protests Slump in Courtroom
Human RightsNews

#EndBadGovernance: Despite Public Outcry, Police Says Fainting By Minors in Court Were Staged

In a controversial court appearance, 76 suspects, majorly minors, were brought before...

Niger Revoke Nationality
News

Niger Adds 10 More People To Nationality Revocation List Over Suspected Terrorism, Security Threats

Ten more people in Niger may temporarily lose their nationality after being...

Senegalese Prime Minister Attacked
NewsPolitics

Convoy of Senegalese Prime Minister Ousmane Sonko Attacked During Election Campaign in Koungueul

Senegalese Prime Minister Ousmane Sonko’s convoy was attacked Wednesday while he campaigned...