Shell, a leading international oil Company, has struck a deal to sell its onshore subsidiary, Shell Petroleum Development Company of Nigeria Limited, (SPDC) at $2.4billion.
The consortium of five mostly local companies wIll acquire onshore assets of Shell’s subsidiary for a consideration of $1.3 billion while they are expected to make an additional payment of up to $1.1 billion relating to prior receivables at completion.
In a statement issued on Tuesday, the Company said the transaction would fulfill Shell’s long-term goal of extracting itself from a challenging operating environment in the Niger Delta region if approved by the government,while retaining a presence in the offshore and deep offshore.
The buyer of the asset, known as Renaissance, is formed of exploration and production companies ND Western, Aradel Energy, First E&P, Waltersmith and Petrolin, all of which are based in Nigeria.
According to Shell, the transaction had been designed to preserve the full range of SPDC’s operating capabilities following the change of ownership.
These include the technical expertise, management systems and processes that SPDC implements on behalf of all the companies in the SPDC Joint Venture (SPDC JV).
It said:“the transaction has been designed to preserve the full range of SPDC’s operating capabilities following the change of ownership. This includes the technical expertise, management systems and processes that SPDC implements on behalf of all the companies in the SPDC Joint Venture (SPDC JV).”
“Following completion, Shell 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.
“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” said Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director.
“It is a significant moment for SPDC, whose people have built it into a high-quality business over many years. Now, after decades as a pioneer in Nigeria’s energy sector, SPDC will move to its next chapter under the ownership of an experienced, ambitious Nigerian-led consortium.”
The statement further stressed that SPDC’s staff will continue to be employed by the company as it transitions to new ownership.
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