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Shell has agreed to sell its onshore oil production operations in Nigeria, following a flurry of other international groups calling for it to leave Nigeria’s restive Niger Delta region.
Nigeria’s 68-year-old Shell Petroleum Development Company (SPDC) will be acquired by a consortium of local and international companies for at least $1.3 billion, the UK-listed oil major announced on Tuesday.
The exit follows ExxonMobil in the US, Eni in Italy, Equinor in Norway and Addax in China, all of which have been in the market for the past two years due to the difficulties of operating in regions plagued by corruption, violence and environmental damage. It has announced a deal to sell land assets in Nigeria. .
Although Shell is not leaving Nigeria completely, the sale marks the end of an era for the company, which has been at the heart of the country’s oil industry for almost 100 years.
The group said it will continue to invest in Nigeria, with a focus on the country’s deepwater oil and integrated gas operations.
“After decades as a pioneer in Nigeria’s energy sector, SPDC will move on to its next chapter under the ownership of an experienced and ambitious Nigerian-led consortium,” said Shell’s Integrated Gas and Upstream Director. Zoe Yujnovich said in a statement.
The acquisition consortium, known as Renaissance, includes Switzerland-based Petrolin and four Nigerian oil producers: ND Western, Aradel Energy, First E&P and Walter Smith.
Shell has been seeking to exit its onshore operations in Nigeria for the past three years.
The company was forced to halt proceedings in 2022 after a Nigerian court ordered Shell to suspend its sale plans pending the outcome of a lawsuit over compensation for environmental damage in the Niger Delta region.
Earlier this month, Nigeria’s Supreme Court upheld the company’s appeal against the ruling and allowed the sale process to resume.
Shell obtained its first exploration license to explore for oil on land in Nigeria in 1938 and successfully drilled the country’s first well in Bayelsa State in the Niger Delta in 1956.
Since then, oil production in the delta region in the country’s south has generated billions of dollars in revenue for companies and the government and is the bedrock of Nigeria’s economy.
SPDC controls 30% of the so-called SPDC joint venture, in partnership with the state-run Nigerian National Petroleum Corporation, which controls 55%.
Local subsidiaries of France’s TotalEnergies and Italy’s Agip will own 10% and 5%, respectively.
The joint venture controls 18 oil production licenses and is operated by SPDC.
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