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Shell Exits Nigeria's Onshore Oil to Focus on Offshore Projects
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Shell plc (SHEL - Free Report) has completed the sale of its Nigerian onshore subsidiary, Shell Petroleum Development Company of Nigeria (SPDC), to Renaissance, a Nigerian-led consortium. This $1.3 billion transaction, previously held back by regulators, is part of Shell’s broader strategy to streamline its operations by exiting onshore oil production in the Niger Delta and focusing on offshore deepwater and integrated gas projects.
The SPDC joint venture includes 15 onshore and three shallow-water oil mining leases, which have long faced environmental and operational challenges such as oil spills and community disputes. By selling its stake, Shell aims to resolve these issues while reinforcing its commitment to deepwater projects.
An Insight Into the SPDC Joint Venture
The SPDC Joint Venture is held jointly by Nigerian National Petroleum Co. Ltd. owning a 55% stake, TotalEnergies SE (TTE - Free Report) owning a 10% stake and Eni S.p.A. (E - Free Report) holding the remaining 5% stake. The 30% stake previously held by Shell, currently carrying a Zacks Rank #3 (Hold),via SPDC, has now been sold to Renaissance.
TotalEnergies has entered into a deal to divest this to Chappal Energies Mauritius Ltd. for $860 million and Eni SpA sold its Nigerian subsidiary, Nigerian Agip Oil Co. Ltd. (NAOC), to a local player, Oando PLC, for nearly $800 million last year but has decided to retain its SPDC JV stake.
Implications for Nigeria’s Oil Industry
This divestment reflects a broader industry trend, with international oil majors like TotalEnergies and Eni shifting their focus offshore. Renaissance’s acquisition signals a growing role for indigenous companies in Nigeria’s energy sector, empowering local firms to take charge of onshore operations.
However, the transition raises questions about the new owner’s ability to manage the assets, especially regarding environmental responsibilities. The Nigerian government has emphasized the need for technical and financial capacity to sustain production and meet regulatory obligations.
Shell’s Future in Nigeria: Deepwater and LNG Investments
Despite leaving the onshore sector, Shell remains deeply invested in Nigeria’s offshore oil and gas industry. The company recently announced an FID in the Bonga North project, highlighting its long-term commitment to deepwater exploration and LNG expansion.
This move positions Nigeria as a key player in the global energy market while addressing sustainability concerns. As international firms pivot offshore, the success of local operators in managing onshore resources will shape the future of Nigeria’s oil industry.
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Shell Exits Nigeria's Onshore Oil to Focus on Offshore Projects
Shell plc (SHEL - Free Report) has completed the sale of its Nigerian onshore subsidiary, Shell Petroleum Development Company of Nigeria (SPDC), to Renaissance, a Nigerian-led consortium. This $1.3 billion transaction, previously held back by regulators, is part of Shell’s broader strategy to streamline its operations by exiting onshore oil production in the Niger Delta and focusing on offshore deepwater and integrated gas projects.
The SPDC joint venture includes 15 onshore and three shallow-water oil mining leases, which have long faced environmental and operational challenges such as oil spills and community disputes. By selling its stake, Shell aims to resolve these issues while reinforcing its commitment to deepwater projects.
An Insight Into the SPDC Joint Venture
The SPDC Joint Venture is held jointly by Nigerian National Petroleum Co. Ltd. owning a 55% stake, TotalEnergies SE (TTE - Free Report) owning a 10% stake and Eni S.p.A. (E - Free Report) holding the remaining 5% stake. The 30% stake previously held by Shell, currently carrying a Zacks Rank #3 (Hold),via SPDC, has now been sold to Renaissance.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
TotalEnergies has entered into a deal to divest this to Chappal Energies Mauritius Ltd. for $860 million and Eni SpA sold its Nigerian subsidiary, Nigerian Agip Oil Co. Ltd. (NAOC), to a local player, Oando PLC, for nearly $800 million last year but has decided to retain its SPDC JV stake.
Implications for Nigeria’s Oil Industry
This divestment reflects a broader industry trend, with international oil majors like TotalEnergies and Eni shifting their focus offshore. Renaissance’s acquisition signals a growing role for indigenous companies in Nigeria’s energy sector, empowering local firms to take charge of onshore operations.
However, the transition raises questions about the new owner’s ability to manage the assets, especially regarding environmental responsibilities. The Nigerian government has emphasized the need for technical and financial capacity to sustain production and meet regulatory obligations.
Shell’s Future in Nigeria: Deepwater and LNG Investments
Despite leaving the onshore sector, Shell remains deeply invested in Nigeria’s offshore oil and gas industry. The company recently announced an FID in the Bonga North project, highlighting its long-term commitment to deepwater exploration and LNG expansion.
This move positions Nigeria as a key player in the global energy market while addressing sustainability concerns. As international firms pivot offshore, the success of local operators in managing onshore resources will shape the future of Nigeria’s oil industry.