FG grants approval for shell’s $2.4bn onshore asset sale amid controversy 

The Federal Government has given the green light for Shell Petroleum Development Company’s (SPDC) $2.4 billion divestment of onshore assets to Renaissance Africa Energy Company Limited, a local oil and gas consortium.

This development, announced in a statement by Renaissance on Wednesday, follows ministerial consent granted by President Bola Tinubu, who also serves as the Minister of Petroleum Resources. The approval signals a resolution to months of regulatory and legal hurdles surrounding the transaction.

Renaissance, which comprises ND Western, Aradel Energy, First Exploration & Production, Waltersmith, and Petrolin, initially agreed to acquire Shell’s onshore oil assets in January for $1.3 billion. These assets include an estimated 6.73 billion barrels of oil and condensate, alongside 56.27 trillion cubic feet of associated and non-associated gas.

The deal faced significant challenges earlier in the year, with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) initially rejecting the transaction in October. According to NUPRC’s CEO, Gbenga Komolafe, the deal “failed to scale regulatory tests,” citing concerns over Shell’s alleged environmental liabilities in the Niger Delta region.

Shell has faced lawsuits and accusations of environmental degradation and human rights abuses in the Niger Delta, with critics urging the oil giant to take responsibility for oil spills and cleanup efforts. The NUPRC maintained that the sale would only proceed if Shell committed to addressing these issues.

The recent approval marks a turning point, signaling the government’s commitment to facilitating investments in the oil and gas sector while addressing environmental concerns. In its statement, Renaissance emphasized the significance of this approval, calling it “a significant step forward” in concluding the transaction.

“Renaissance Africa Energy Company Limited is pleased to announce that the Minister of Petroleum Resources has granted his consent to the sale of The Shell Petroleum Development Company to Renaissance.

“This approval marks a significant step forward from the announcement of the Sale and Purchase Agreements in January 2024.”

President Tinubu’s special adviser on energy, Olu Verheijen, had earlier indicated that the administration was working to resolve the challenges surrounding the deal.

This approval comes amid a wave of divestments in Nigeria’s oil and gas sector. In October, the government approved four other major transactions, including Mobil Producing Nigeria Unlimited’s sale to Seplat Energy Offshore Limited and TotalEnergies’ divestment to Telema Energies Nigeria Limited.

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