Renaissance Africa Energy to acquire Shell Nigeria’s onshore assets for $2.4bn

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Renaissance Africa Energy has confirmed the signing of what it called a landmark transaction with Shell Plc to acquire its entire shareholding in the Shell Petroleum Development Company of Nigeria Limited which controls onshore assets.

Renaissance is a consortium consisting of ND Western Limited, Aradel Holdings Plc, the Petrolin Group, FIRST Exploration and Petroleum Development Company Limited, and the Waltersmith Group.

Shell had earlier announced that Shell PLC, on Tuesday, had “reached an agreement to sell its oil business in the Niger Delta, the Shell Petroleum Development Company of Nigeria Limited (SPDC),” to Renaissance Africa Energy.

Shell, for years, has sought to sell its Nigerian oil and gas business but will remain active in Nigeria’s more lucrative and less problematic offshore sector.

Shell’s exit is part of a broader retreat by western energy companies from Nigeria as they focus on newer, more profitable operations. Exxon Mobil, Italy’s Eni and Norway’s Equinor have struck deals to sell assets in the country in recent years.

The British major will sell The Shell Petroleum Development Company of Nigeria Limited (SPDC) for a consideration of $1.3 billion, it said in a statement, while the buyers will make an additional payment of up to $1.1 billion relating to prior receivables at completion.

“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,” Shell head of upstream Zoë Yujnovich said.

In a statement on its website on Tuesday, Renaissance said the acquisition marks a significant milestone, establishing its strategic position in the Nigerian market.

The consortium said it was “committed to ensuring a smooth transition and looks forward to leveraging its expertise in partnership with SPDC’s industry-leading staff and working in partnership with all the stakeholders in the SPDC-JV to drive continued growth and success in Nigeria and beyond.”.
However, Renaissance said, “the completion of the transaction is subject to the requisite regulatory approvals.”
Also reacting, one of the companies that made up the consortium, Aradel Holdings Plc, said the acquisition “marks a significant milestone for Aradel, which will bring enormous benefits to its shareholders, further strengthen its financial outlook, and consolidate its strategic positioning in the Nigerian energy market.”

Aradel disclosed that it is committed to working in partnership with all the stakeholders in Renaissance and the SPDC Joint Venture to ensure a smooth transition and drive continued growth and success in Nigeria and beyond.

Aradel’s Chief Executive Officer/Managing Director, Adegbite Falade, was quoted as saying: “This successful acquisition represents a key step in our journey to becoming a leading energy company in Africa and aligns with our long-term strategic growth plans. It also demonstrates our commitment to our “3R” strategy of resilience, robustness, and redundancy.”