The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has approved Shell International Plc’s $1.3 billion sale of its onshore assets to Renaissance, a consortium of Nigerian oil companies and an international energy firm.
The deal, which involves Shell’s 75-year-old onshore assets, is now pending final approval from President Bola Tinubu, who also serves as the Minister of Petroleum Resources.
The approval from the NUPRC marks a significant step towards closing the sale, which is seen as pivotal for boosting Nigeria’s oil production, increasing government revenues, supporting the naira, and advancing the country’s gas development goals under the Petroleum Industry Act (PIA).
A senior government official confirmed that the NUPRC has recommended the transaction to the Minister of Petroleum for final sign-off, but further steps are on hold pending the president’s approval.
Shell, which has been a key player in Nigeria’s oil sector since the 1930s, has faced challenges with onshore operations, including oil spills, theft, and legal disputes. The company’s decision to sell its onshore assets is part of a strategic shift to focus on deepwater and integrated gas projects.
In January, Shell announced its agreement to divest the assets to Renaissance, a consortium that includes ND Western, Aradel Energy, First E&P, Waltersmith, and Swiss-based Petrolin.
Key Economic Impact
The Shell-Renaissance deal is expected to have a profound impact on Nigeria’s oil and gas sector, with the consortium committing to a $7 billion investment to develop the Bonga assets and increase oil production.
If the sale proceeds, Shell executives have pledged to help Nigeria increase oil output by an additional 300,000 to 500,000 barrels per day (bpd) within three years, while also fast-tracking gas projects that are crucial to the country’s energy future.
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Industry insiders say the deal could provide a much-needed boost to Nigeria’s crude production, which has slumped to around 1.3 million bpd—far below the country’s capacity of 2.2 million bpd—due to operational inefficiencies and sabotage. Developing the Bonga Southwest field, a key part of Nigeria’s oil strategy is expected to cost $10 billion and could add up to 1 billion barrels to the country’s reserves.
Presidential Approval Pending
While the NUPRC’s approval moves the deal closer to completion, the final decision rests with President Tinubu, who has been out of the country in recent weeks. Until the president signs off on the deal, key steps such as statutory payments remain on hold. However, there is optimism among government officials that the deal will proceed once the president returns and reviews the NUPRC’s recommendation.
The sale of Shell’s onshore assets has garnered significant attention due to its potential to reshape the Nigerian oil sector. The assets include 250 producing oil wells, 37 gas wells, four gas plants, and two onshore oil export terminals.
Shell will retain a 25.6% stake in Nigeria’s Liquefied Natural Gas (NLNG) plant, which is not part of the sale, and its presence in Nigeria will remain significant through deepwater operations and gas distribution businesses.
Renaissance Consortium and Nigeria’s Gas Ambitions
Renaissance, the consortium acquiring Shell’s onshore assets, includes some of Nigeria’s most prominent upstream companies, each with a proven track record in redeveloping mature oil fields.
The consortium is expected to play a crucial role in Nigeria’s gas monetization strategy, as the country seeks to expand gas production and distribution under its “Decade of Gas” initiative.
Tony Attah, a former Shell executive and managing director of Nigeria LNG, has been appointed as Renaissance’s CEO, signalling the consortium’s focus on leveraging expertise to advance Nigeria’s gas ambitions.
Attah’s leadership is expected to bolster the consortium’s efforts to support the country’s push for a more sustainable, gas-driven economy.
The deal represents a significant victory for Nigeria’s indigenous oil companies, which continue to play an increasingly prominent role in the country’s energy landscape.
(Edited by Oludare Mayowa; omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)
