Issues that led to the blockage of Shell’s bid to sell off its asset for up to $2.4 billion to Renaissance consortium, comprising five companies by upstream oil regulator, Nigerian Upstream Petroleum Regulatory Commission (NUPRC) would soon be resolved, according to Presidency source. The two companies could then sit and continue negotiation.
NUPRC found some issues with the proposed sale of the oil major’s onshore assets to a consortium of local companies but they should be resolved soon, Presidential Special Adviser on Energy, Olu Verheijen, said.
“I am sure that in short order, it will be resolved with the regulator in a way that addresses our own objectives to continue to accelerate exits for international oil companies,” Verheijen said during a call with the energy reporters’ in Lagos.
The Federal Government had blocked Shell’s bid to dispose of Shell’s entire onshore and shallow-water oil operations, but approved a similar deal by Exxon Mobil with Seplat Energy which had awaited regulatory approval for more than two years since a $1.28 billion fee was announced in February 2022.
NUPRC CEO Gbenga Komolafe, in a speech in Abuja, had said the Shell deal “could not scale (the) regulatory test,” but did not elaborate.
President Bola Tinubu had signalled on Oct. 1 that the Exxon-Seplat deal would receive ministerial approval in a matter of days after getting clearance from the regulator.
“We welcome the regulator’s announcement and look forward to formally receiving the ministerial consent as we work toward the conclusion of the sale,” Exxon said in a statement.
A Shell spokesperson did not immediately respond to a request for comment.
The rejection was seen as a blow to Shell’s strategy to pivot toward deepwater for future investments and reflects the growing challenges that oil companies face in Nigeria.
Oil majors operating in Nigeria, Africa’s largest oil exporter, have been retreating from onshore operations hampered by theft and sabotage, opting to focus future investments on newer and more lucrative deep offshore fields.
The Shell assets hold a combined estimated volume of 6.73 billion barrels of oil and condensate and 56.27 trillion cubic feet of associated and non-associated gas.
In trying to exit the oil-rich Niger Delta, Shell follows Exxon Mobil, TotalEnergies (TTEF.PA), opens new tab and Eni (ENI.MI), who wanted to do so due to security concerns.
NUPRC approved the sale of onshore assets by Eni’s local unit to Oando in July and another from Equinor (EQNR.OL), to new entrant Project Odinmim.
Environmental activists and some communities opposed the Shell-Renaissance deal, tying Shell to a string of lawsuits for environmental restoration and compensation for land and rivers damaged by oil spills.
In April, NUPRC started evaluating Shell’s divestment to the consortium, which comprises four Nigerian exploration and production companies and an international energy group.
