In a significant development, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has given its approval to Shell International Plc’s bid to sell its onshore assets to Renaissance, a consortium of four Nigerian exploration and production companies and an international energy group, for $1.3 billion.
The transaction, which involves Shell’s 75-year-old onshore assets, has been approved by the regulatory commission, as required by the Petroleum Industry Act (PIA). However, the deal still requires the final approval of President Bola Tinubu, who currently holds the portfolio of Minister of Petroleum Resources.
The sale is expected to increase Nigeria’s oil production, boost government petrol dollar earnings, support the naira, and accelerate the government’s plans for gas development. Shell executives have promised to assist in speedily developing Bonga assets, support an increase in oil production, and accelerate the government’s plans for gas development if the deal is successful.
The buyer, Renaissance, comprises ND Western, Aradel Energy, First E&P, Waltersmith, and Petrolin, a Swiss-based trading and investment company. The consortium has demonstrated a track record of redeveloping mature assets in the Niger Delta and has the potential to become a pillar of Nigeria’s gas monetization strategy.
The deal is seen as a win for indigenous companies, with the Renaissance consortium comprising some of Nigeria’s most respected upstream companies. The transaction is also expected to have implications for Bonga’s production and development plans, with the potential to add around 1 billion barrels to Nigeria’s oil reserves.
Shell’s presence in Nigeria will still be significant post-sale, with three businesses remaining outside the scope of the deal, including Shell Nigeria Exploration and Production Company, Shell Nigeria Gas, and Daystar Power Group.
The approval of the deal by NUPRC is a significant step forward, but the final approval of the President is still awaited. Once approved, the transaction is expected to have far-reaching implications for Nigeria’s oil and gas sector.
