FG backs Shell’s onshore exit, says ‘swift consideration will be given’

The federal government says it is in support of Shell’s decision to exit onshore production and would give consideration to the firm’s assets sales.

On January 16, 2024, the British oil major announced plans to sell its Nigerian onshore assets to Renaissance — a consortium of local companies — for over $1.3 billion.

The deal had come almost three years after the giant energy firm sought to sell its Nigerian oil and gas business in 2021.

Since Shell began its oil and gas business in Nigeria in the 1930s, it has struggled for years with onshore oil spills as a result of theft, sabotage, and operational issues that led to costly repairs and high-profile lawsuits.

Shell said the sale of its Nigerian subsidiary, Shell Petroleum Development Company of Nigeria Limited (SPDC), “is subject to approvals by the Federal Government of Nigeria and other conditions”.

Speaking on the transaction, Heineken Lokpobiri, minister of state, petroleum resources (oil), said diversification of onshore assets by international oil companies (IOCs) benefits indigenous firms, thereby promoting profitability and economic stability.

“…and because we our (sic) committed to a business-friendly oil and gas sector, we support Shell’s onshore asset divestment,” the minister said.

“Our approach prioritizes law adherence without compromising legitimate businesses operations therefore, once we receive necessary documents, swift consideration will be given.

“Upstream operations remain intact, with a focus on addressing sector concerns, including insecurity and aging infrastructure. Our engagements with companies aim to enhance pipeline technology and critical infrastructures.

“President’s approval for a licensing bid round reflects our commitment to prompt industry advancement. Hence, the reassurance against adverse effects, as we engage with IOCs on decommissioning and abandonment, ensuring secured fund handling.”