British oil and gas company Shell has agreed to sell its Nigerian onshore subsidiary Shell Petroleum Development Company of Nigeria (SPDC) to Renaissance for $1.3bn.
Renaissance is a consortium of four Nigeria-based oil and gas companies, including ND Western, Aradel Energy, First E&P, Waltersmith and an international energy company, Petrolin.
Under the terms of the sale agreement, Renaissance will make additional cash payments of up to $1.1bn, primarily relating to prior receivables and cash balances.
The transaction, which is subject to approvals by the Federal Government of Nigeria and other conditions, will preserve SPDC’s operating capabilities after the change of ownership.
The operating capabilities include technical expertise, management systems and processes on behalf of all the participants in the SPDC Joint Venture (SPDC JV).
Shell integrated gas and upstream director Zoë Yujnovich said: “This agreement marks an important milestone for Shell in Nigeria, aligning with our previously announced intent to exit onshore oil production in the Niger Delta, simplifying our portfolio and focusing future disciplined investment in Nigeria on our Deepwater and Integrated Gas positions.
“It is a significant moment for SPDC, whose people have built it into a high-quality business over many years. Now, after decades as a pioneer in Nigeria’s energy sector, SPDC will move to its next chapter under the ownership of an experienced, ambitious Nigerian-led consortium.
“Shell sees a bright future in Nigeria with a positive investment outlook for its energy sector. We will continue to support the country’s growing energy needs and export ambitions in areas aligned with our strategy.”
SPDC owns a 30% stake and is the operator of the JV, Nigerian National Petroleum Corporation owns a 55% stake, Total Exploration and Production Nigeria a 10% stake, and Nigeria Agip Oil owns the remaining 5% stake.
SPDC JV holds 15 oil mining leases for petroleum operations onshore and three leases for petroleum operations in shallow water in Nigeria.
Upon closing of the sale, 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).
Shell will focus investment on Deepwater and Integrated Gas positions, and Renaissance will continue to employ SPDC staff after the change in ownership.
The British oil and gas company will provide up to $1.2bn secured term loans at closing and provide additional financing of up to $1.3bn in the future.
