By Adedapo Adesanya
Shell has agreed to sell its Nigerian onshore oil and gas subsidiary, the Shell Petroleum Development Company of Nigeria Limited (SPDC), to Renaissance, a group of five companies, for $2.4 billion.
The British oil company said on Tuesday in a statement that it would sell for a consideration of $1.3 billion, while the buyers will make an additional payment of up to $1.1 billion relating to prior receivables at completion.
Shell’s Nigerian oil and gas business has been plagued by spills and theft for years, since 2021.
Two weeks ago, the Supreme Court granted the appeal of SPDC Nigeria by ruling that Shell is entitled to a hearing regarding an alleged oil spill in the Niger Delta where a lower court had asked the company to pay millions in damages.
This follows the Court of Appeal’s ruling suspending the company’s asset sale and its directive to settle a judgment claim before addressing the case.
The Supreme Court ruled that the appellate court did not thoroughly examine the merits of the case and ordered that Shell be given an opportunity for a hearing
In 2022, Shell Petroleum Development Company of Nigeria Limited received a court order restraining it from divesting its assets until the case’s resolution.
Consequently, its parent company decided to temporarily halt the sale of its onshore oil operations.
Onshore operations are susceptible to crude theft and pipeline vandalism, negatively impacting Nigeria’s oil production and leading other top oil and gas companies to divest.
Shell, like other majors, is directing its attention toward deep-water drilling while divesting from onshore operations.
