FG Blocks Shell’s $1.3bn Sale of Oil Assets to Renaissance Group

The Federal Government of Nigeria has officially rejected Shell’s proposed $1.3 billion sale of its onshore oilfields to the Renaissance Group, according to reports from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

The regulatory body cited concerns over the buyer’s qualifications to effectively manage the assets, raising significant questions about the future of Shell’s operations in the region.

A Shell spokesperson confirmed that the company is cooperating with NUPRC, stating, “Shell and the government are in ongoing communication as part of the approval process for the sale of SPDC.

SPDC will continue to provide the regulator with all information needed to complete the approval process.”

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Despite Shell’s assurances, the NUPRC has maintained that the Renaissance consortium failed to demonstrate its capability to oversee the assets adequately.

This decision comes in the wake of a broader trend where international oil companies are reconsidering their positions in Nigeria, with Shell specifically aiming to streamline its portfolio by prioritizing investments in deepwater and integrated gas projects.

NUPRC’s Chief Executive, Gbenga Komolafe, has indicated that a faster approval could be granted if Shell agrees to assume responsibility for environmental damages, particularly oil spills, in the Niger Delta, alongside a commitment to finance necessary cleanup efforts.

Complicating matters further, local communities have filed a N500 billion claim against Shell, alleging violations of a previous “Mareva” injunction, which aims to block the sale of its onshore assets.

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The communities argue that any sale without addressing existing liabilities would exacerbate the environmental and social issues already plaguing the region.

The Niger Delta has long been a hotspot for oil theft and sabotage, which have severely impacted the profitability and sustainability of oil operations.

Executives from other major oil firms, such as TotalEnergies, have echoed these sentiments, noting an absence of exploration activities in the region due to escalating security concerns.