Nigeria has rejected Shell’s proposed $1.3 billion sale of its onshore oil production unit to Renaissance Africa Energy, citing regulatory concerns. The sale, intended to facilitate Shell’s exit from the shallow water sector in the Niger Delta, was blocked by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), according to Chief Executive Gbenga Komolafe, who stated that the transaction did not meet regulatory standards. This decision comes as the country’s regulators approved ExxonMobil’s $1.28 billion sale of onshore assets to Seplat Energy, highlighting the challenges faced by investors divesting from Nigeria’s oil sector.
Speaking at an oil conference in Abuja, Komolafe indicated that the sale to Renaissance failed the “regulatory test” but did not provide specific details about the decision. Previously, Komolafe had expressed skepticism about Renaissance’s capacity to manage Shell’s operations in the Niger Delta, a region known for its complex operational and security challenges. Renaissance Africa Energy, a lesser-known consortium, has not commented on the matter, and Shell did not immediately respond to requests for further clarification.
While Shell’s exit from the Niger Delta faces obstacles, ExxonMobil’s long-delayed $1.28 billion sale of onshore assets to Seplat Energy has cleared regulatory hurdles. Komolafe announced that the much-anticipated ministerial consent had been granted, allowing the deal to move forward. Seplat, a London-listed company, acknowledged the regulator’s announcement but has yet to provide further comment on the approval. This move signals a positive step for ExxonMobil, which has been seeking to divest from onshore operations in Nigeria.
Shell, a European oil major, has been trying to sell its onshore assets in Nigeria’s swamplands for several years as part of a broader strategy to reduce its involvement in the region, where it has operated for 68 years. The company has faced rising operational costs and security risks, including frequent attacks on its pipelines by militants and oil thieves. Despite the setback, Shell remains committed to completing its divestment and transitioning its focus to offshore oil and gas projects.
Nigeria’s President, Bola Tinubu, who also serves as the country’s petroleum minister, holds ultimate authority over oil asset sales, with input from the NUPRC.
Nigeria Blocks Shell’s $1.3bn Sale of Onshore Oil Assets, Approves ExxonMobil Deal
