Why FG Blocked Shell’s $1.3bn Assets Sale to Renaissance

By Adedapo Adesanya 

Nigeria refused to approve Shell’s $1.3 billion divestment of its onshore and shallow water assets to the local consortium, Renaissance.

Business Post had reported earlier that the federal government approved the ExxonMobil-Seplat deal after over two years of delay.

Also approved were the Equinor–Project Odinmim which was approved in line with the Petroleum Industry Act (PIA) and granted ministerial consent as well as the Agip to Oando, which was processed according to regulatory guidelines and then approved.

Also, TotalEnergies’ 10 per cent divestment to Telema Energies was approved with ministerial consent.

Announcing the government’s decision, the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mr Gbenga Komolafe, revealed that while the government had processed five divestment applications, only four were approved – leaving out asset sale to Renaissance is a consortium made up of four indigenous companies including Aradel, ND Western, First Exploration and Production (E&P) and WalterSmith as well as the international energy group, Petrolin.

These assets, initially at $2.4 billion and now at $1.3 billion, include an estimated 6.73 billion barrels of crude oil and condensate, along with 56.27 trillion cubic feet of gas.

Speaking at an event marking the NUPRC’s third anniversary, Mr Komolafe did not provide specific reasons for the government’s decision to block the Shell-Renaissance deal.

“We have processed four of the transactions, and four of them have received ministerial consent,” he said. “We have processed four of the transactions, and four of them have received ministerial consent,” he said.

However, two industry experts told Business Post that the FG rejected the transaction because the consortium does not have the financial, experiential, and technical capacities to take over the assets.

Mr Komolafe also highlighted the government’s commitment to ensuring that all transactions comply with the regulatory standards established under the Petroleum Industry Act (PIA).

He further emphasized that this marks the first time in history that such a comprehensive regulatory framework has been implemented to ensure transparent divestment processes within Nigeria’s oil and gas sector.