Shell Plc has agreed to sell its onshore oil assets in Nigeria to a consortium of local companies for more than $1.3 billion.
The company made this known in a statement on Tuesday.
Shell said it would sell its Nigerian subsidiary, Shell Petroleum Development Company of Nigeria Limited (SPDC), for $1.3 billion. Shell added that buyers will be making an additional payment of up to $1.1 billion at completion for prior receivables.
According to Shell, the buyer of the Renaissance asset is a consortium comprised of:
ND Western, Aradel Energy, First Exploration & Production (E&P), Waltersmith, and Petrolin.
The statement reads:
“Completion of the transaction is subject to approvals by the Federal Government of Nigeria and other conditions.”
Shell stated that it will continue to be a significant investor in Nigeria’s energy sector through its deepwater and integrated gas businesses.
“We will retain a role in supporting the management of SPDC JV facilities that supply a major portion of the feed gas to Nigeria LNG (NLNG), to help Nigeria achieve maximum value from NLNG”.
SPDC holds 15 oil mining leases for onshore petroleum operations and three for shallow water petroleum operations in Nigeria, which are operated by SPDC.
“The consideration payable to Shell as part of the transaction is US$1.3bln.”
“The buyer will make additional cash payments to Shell of up to US$1.1bln, primarily relating to prior receivables and cash balances in the business, with the majority expected to be paid at completion of the transaction”.
“The amounts above will be adjusted to reflect any shareholder distributions, above US$200 million, made before completion. Other contingent payments, including those related to gas supply to NLNG, may become payable depending on business performance and fluctuation of product prices.”
Shell stated that the transaction does not affect its three other major businesses in Nigeria.
These other businesses are:
Shell Nigeria Exploration and Production Company Limited (SNEPCo), Shell Nigeria Gas Limited (SNG), and Daystar Power Group.
“This agreement marks an important milestone for Shell in Nigeria,” Zoe Yujnovich, Shell’s integrated gas and upstream director, said.