The Nigerian unit of London-based oil supermajor Shell Plc struck a deal with a consortium of five companies, setting the scene for the latter to acquire its onshore business in the country.
The deal was sealed after years-long setbacks met by the company in its efforts to rid itself of the assets.
Shell Petroleum Development Company of Nigeria Limited (SPDC) will get up to $2.4 billion from the transaction including an initial sum of $1.3 billion.
A further payment of $1.1 billion relating to prior receivables and cash balances is expected at the consummation of the deal, Shell said in a statement on Tuesday.
“This agreement marks an important milestone for Shell in Nigeria,” said Zoe Yujnovich, Shell’s director of integrated gas and upstream.
It will help in “simplifying our portfolio and focusing future disciplined investment in Nigeria on our deepwater and integrated gas positions,” he added.
Renaissance, the buyer, comprises locally-based energy firms – ND Western, Waltersmith, Aradel Energy, Petrolin and First E&P.
The deal is a relief for Shell, which has sought to offload the assets since 2021 because running them has been complicated by sabotage, theft and spills, some of which have sparked litigations and environmental liabilities.
But it will retain its offshore business, being less prone to such operational risks. Shell says the spills are caused almost entirely by theft.
