Nigerian consortium to take over Shell’s onshore business in Nigeria in historic M&A

16 Jan 2024 | Market News

Shell has announced today the sale of its onshore Nigerian subsidiary, the Shell Petroleum Development Company (SPDC)

Shell has announced today the sale of its onshore Nigerian subsidiary, the Shell Petroleum Development Company (SPDC), to the Renaissance consortium comprised of ND Western, Aradel Energy (former Niger Delta E&P), First E&P, Waltersmith and Petrolin.

The transaction is subject to approvals by the Nigerian government and would be the largest M&A in Nigeria’s oil & gas history. The transaction is valued at some $1.3bn, plus additional cash payments of up to $1.1bn relating to prior receivables and cash balances, Shell has said.

The major will also provide secured term loans of up to $1.2bn at closing to cover diverse funding requirements and will provide additional financing of up to $1.3bn in the coming years to fund the SPDC share of development of gas resources required to feed Nigeria LNG, in which Shell retains a 25.6% interest.

“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,” the company said.

The transaction marks the exit of yet another IOC from Nigerian onshore blocks and follows the sale of Eni’s onshore business to local player Oando last year. TotalEnergies has also expressed its intent to divest from its 10% stake in the SPDC JV.

The deal comprises 18 licenses, including 15 onshore and 3 in shallow water with some 458 million barrels of oil equivalent of proved reserves. These include some of Nigeria’s biggest and most strategic gas assets and gas fields, making Renaissance a strategic player in the Nigerian energy transition journey and the development of a gas-based economy.

The consortium comprises some of Nigeria’s most established and credible upstream players with a demonstrated track record of operating upstream assets in the Niger Delta. The group has already proven its ability to successfully take over and redevelop mature assets after the incorporation of ND Western in 2011 between Aradel Holdings, Petrolin, First E&P, and Waltersmith.

“The M&A announced today is historic for the development of local content across the African upstream,” said Yemi Ibidunni, Event Director at Hyve.

“It marks a significant milestone in Nigeria’s local content development journey and sends a strong signal that African independents cannot be ignored. We address our most sincere congratulations to ND Western, Aradel Holdings, First E&P and Waltersmith who have been steady supporters and participants at AOW over the years.”

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