Global Oil Giant, Shell, to Sell Nigerian Company After Sacking Workers, 5 firms ready to buy

Global Oil Giant, Shell, to Sell Nigerian Company After Sacking Workers, 5 firms ready to buy

  • The British energy giant, for a price as high as $2.4 billion
  • The decision was triggered by hundreds of oil leaks at Shell's onshore sites that have caused years of agony, according to reports
  • The company still plans to keep working in the country's offshore market, which is seen as more profitable and trouble-free

Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market

After almost a century of operations, British energy giant Shell has decided to sell its Nigerian onshore oil and gas division for up to $2.4 billion to a group of five primarily local businesses.

Global Oil Giant, Shell to Sell Nigerian Company After Sacking Workers
Shell Nigerian company will be sold to will be sold to Renaissance. Photo Credit: Shell
Source: UGC

The company will be sold to Renaissance, comprising four exploration and production companies based in Nigeria - ND Western, Aradel Energy, First E&P, and Waltersmith,- as well as the trading and investment firm Petrolin, headquartered in Switzerland.

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Completion of the transaction is subject to approvals by the Federal Government of Nigeria and other conditions.

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Shell endured

Operating in West Africa since the 1930s, Reuters reported that Shell has endured years of hardship due to hundreds of oil leaks at its onshore facilities, which resulted in expensive repairs and high-profile legal actions due to theft, sabotage, and operational problems.

Although it has been trying to sell its oil and gas company in Nigeria since 2021, it plans to keep working in the country's more profitable and trouble-free offshore market.

According to a statement from Shell, The Shell Petroleum Development Company of Nigeria Limited (SPDC) would be sold for a consideration of $1.3 billion. At completion, the buyers will also be required to pay up to an extra $1.1 billion for prior receivables.

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Shell remains in Nigeria

The deal is designed to maintain SPDC's whole operational capacity after the ownership transition.

This means that employees at SPDC will remain with the company after it changes ownership. SPDC will not change as the operators even after the transaction.

To help Nigeria extract the most value from Nigeria LNG (NLNG), Shell stated that it will continue to assist the management of SPDC JV facilities that provide a significant amount of the feed gas to NLNG when it is completed.

With 18 onshore and shallow water mining leases, Shell's SPDC Limited operates the joint venture and owns a 30% share in it.

Other partners are the Nigerian National Petroleum Corporation (NNPC) of the state, which owns 55% of the venture; TotalEnergies (TTEF.PA), which owns 10%; and Eni (ENI.MI), an Italian company, which owns 5%.

In addition to its activities and holdings in many deep offshore areas, Shell maintains a liquefied natural gas plant as well as other assets in Nigeria.

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This comes after the Global oil company Shell is implementing workforce reductions across multiple divisions as part of its cost-cutting and competitiveness improvement efforts.

With CEO Wael Sawan at the helm, the UK-based oil and gas company aims to achieve a reduction in structural costs of up to $3 billion (£2.36 billion) by the conclusion of 2025.

Nigeria attracts $5bn investment from global oil giant after GSK, P&G announced exit from country

Legit.ng earlier reported that Shell has committed to investing $5 billion in offshore oil investment opportunities in Nigeria.

In addition, the global group of energy and petrochemical companies pledged to spend a further $1 billion in five to 10 years to boost natural gas output for domestic supplies and exports.

According to a Reuters report, a presidential spokesperson, Ajuri Ngelale, made the announcement.

Source: Legit.ng

Authors:
Zainab Iwayemi avatar

Zainab Iwayemi (Business Editor) Zainab Iwayemi is a business journalist with over 5 years experience reporting activities in the stock market, tech, insurance, banking, and oil and gas sectors. She holds a Bachelor of Science (B.sc) degree in Sociology from the University of Ilorin, Kwara State. Before Legit.ng, she worked as a financial analyst at Nairametrics where she was rewarded for outstanding performance. She can be reached via zainab.iwayemi@corp.legit.ng

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