Shell (SHEL.L), Thursday, announced that it had completed the sale of its Nigerian onshore subsidiary, Shell Petroleum Development Company of Nigeria Limited (SPDC) to Renaissance Africa Energy, a consortium of five companies.
Shell had, on January 16, 2024, reached an agreement to sell its Nigerian onshore subsidiary, the Shell Petroleum Development Company of Nigeria Limited (SPDC), to Renaissance Africa Energy.
The completion of the transaction was subject to approvals by the federal government of Nigeria, and other conditions.
According the acquisition terms, the consideration payable to Shell as part of the transaction is US$1.3bln. The buyer will 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.
In line with the transaction, it was designed to preserve the full range of SPDC’s operating capabilities following the change of ownership. This includes the technical expertise, management systems and processes that SPDC implements on behalf of all the companies in the SPDC Joint Venture (SPDC JV)*. SPDC’s staff will continue to be employed by the company as it transitions to new ownership.
Following 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.
The divestment of SPDC aligns with Shell’s intent to simplify its presence in Nigeria through an exit of onshore oil production in the Niger Delta and a focus of future disciplined investment in its Deepwater and Integrated Gas positions.
By this development, Renaissance now controls SPDC’s 30% stake in the SPDC JV, an unincorporated joint venture with the government-owned Nigerian National Petroleum Corporation (55%), Total Exploration and Production Nigeria Ltd (10%) and Agip Energy and Natural Resources (Nigeria) Limited (5%).
According to Shell, no significant impairments are expected as a result of completion of the transaction. Renaissance is a consortium of five companies comprising four exploration and production companies – ND Western, Aradel Energy, First E&P, Waltersmith – based in Nigeria – and the international energy group, Petrolin.
