One of the leading oil and gas stories in Nigeria this week is the Nigerian government’s approval of the sale of Shell’s onshore assets to the Renaissance Group, ending nearly 100 years of operations in the Niger Delta oil field.
Renaissance said the deal, which was previously rejected by the oil regulatory body (NUPRC), received approval from the Minister of Petroleum, Heineken Lokpobiri, for a sum of $2.3 billion.
Shell entered Nigeria’s onshore field in the 1930s, making it one of the oldest international oil companies (IOCs) in the country.
Its shallow-water assets are estimated to contain approximately 6.73 billion barrels of oil and condensate and 56.27 trillion cubic feet of gas.
In January 2024, Shell announced plans to sell $1.3 billion worth of onshore oil assets to Renaissance Africa Energy, a local consortium made up of five companies, but faced pushback from regulators and the communities in which it operates.
Meanwhile, the Anglo-Dutch company confirmed earlier this week that the deal has been approved by the federal government, with one of the five interested oil majors, Aradel, also confirming the move in a statement.
Shell has struggled for years with hundreds of onshore oil spills resulting from theft, sabotage, and operational issues, which led to costly repairs and high-profile lawsuits.
According to a report, Shell has spent more than $80 million in compensation to residents of the area affected by the spills.
Who are those taking over the assets?
Shell onshore asset, Shell Petroleum Development Company (SPDC), is the most important oil company in the country and part of a joint venture which produces about 30% of Nigeria’s oil and gas. Shell owns 30% of the JV, alongside 55% held by the state-owned Nigerian National Petroleum Company. TotalEnergies and Italian oil company, Eni control 10% and 5%, respectively.
Before the approval from the government which some believed it was driven by the recent Shell’s $5 billion investment in the deepwater oilfield Bonga North, Nigerian regulators had concerns about Renaissance’s ability to finance the project.
There were also worries over whether Renaissance could cover the bill for the clean-up of environmental damage across SPDC’s operations and whether those costs had been properly assessed by Shell.
The Renaissance Group made up for five local energy companies include ND Western Ltd., Aradel Holdings Plc, Petrolin Group, FIRS Exploration and Petroleum Development Co. and Waltersmith Group.
ND Western Limited
ND Western Limited is an independent Nigerian oil and gas exploration and production company, formed by a consortium of four companies.
The consortium are Niger Delta Petroleum Resources Limited (NDPR), Petrolin Trading Limited (PETROLIN), FIRST Exploration & Petroleum Development OML 34 Limited, and Walter-Smith Exploration and Production Limited.
Incorporated on April 20, 2011, as a Special Purpose Vehicle, ND Western was established to acquire the 45% participating interest in Oil Mining Lease (OML) 34 previously held by SPDC, Total E&P Nigeria Limited, and Nigerian Agip Oil Company Limited.
The transfer of assets was formalized with the exchange of contracts on June 17, 2011, during a signing ceremony of the Sale and Purchase Agreement with the NNPC/Shell/Total/Agip JV. The transaction was completed on September 1, 2012.
Currently, ND Western holds a 45% participating interest in OML 34, in an unincorporated joint venture with Nigerian Petroleum Development Company Limited (NPDC), which owns the remaining 55%. NPDC, as the operator of the asset, oversees its day-to-day operations.
In October, the company named Olanrewaju Kalejaiye as its CEO, to manage and oversee its various operations across the country.
Aradel Holdings Plc
Aradel is one of the largest oil and gas companies in Nigeria by market valuation. The company operates across Nigeria’s upstream, midstream, downstream, power, and renewables sectors.
Listed on the Nigerian Stock Exchange (NGX) in October 2024, Aradel boasts an impressive valuation of nearly N3 trillion, making it one of the most liquid companies on the NGX.
Following a statement from Renaissance Group announcing that the federal government has approved the sale of Shell, Aradel’s CEO, Adegbite Falade, praised the move, calling it “a significant step forward” from the initial announcement in January 2024.
“Aradel Holdings Plc (“Aradel”), listed on the Nigerian Exchange Limited, is pleased to announce that the Minister of Petroleum Resources has granted his consent to the sale of The Shell Petroleum Development Company (SPDC) to Renaissance Africa Energy Limited (“Renaissance”).
“For Aradel, as a shareholder in Renaissance, this approval marks a significant step forward from the announcement of the Sale and Purchase Agreements in January 2024. Further details will be provided in due course,” Falade said in a statement.
FIRST Exploration
First Exploration, FIRST E&P, is an indigenous energy company established in 2011. The company operates in Nigeria’s upstream and downstream sector.
According to its website, the company has significant interests in assets in OML 83, OML 85, OML 34, OML 71, OML 72.
FIRST E&P operations significantly contribute to Nigeria’s oil production, delivering a reliable output of almost 60,000 barrels.
Interestingly, the energy company CEO, Ademola Adeyemi-Bero, was recently named the Chairman of OPEC board of governors for 2025.
FIRST E&P plays a vital role in Nigeria’s upstream oil and gas development, including the operation of the Anyala and Madu oil fields. These projects, in collaboration with partners like the Nigerian National Petroleum Corporation (NNPC), have advanced the country’s energy production and self-reliance.
Petrolin Group
Petrolin is an international petroleum group active in hydrocarbons, mines and infrastructure.
The oil company operates in 10 countries across the world, with exploration and porduction operations in African countries such as Nigeria, Congo, Malawi and Zambia.
Established in 1992, Petrolin has significant interest in OML 53 and 54. According to its website, the oil firm average production in the first half of 2020 is 10,000 barrels per day and 41,040 million cubic feet of gas per day.
Waltersmith Group
Waltersmith Group is an energy company established in 1996, with significant interests in the upstream sector.
Waltersmith holds a 3% working interest in OML 34, located in the Western Niger Delta, covering an area of approximately 950 km² onshore Nigeria.
In 2012, Waltersmith participated in the SPDC JV divestment program as part of the ND Western Consortium, which successfully acquired a 45% interest in OML 34.
Waltersmith also holds an 8.3% interest in the ND Western Consortium and is the operator of the Ibigwe marginal field, OML 16, located in the Ohaji/Egbema Local Government Area of Imo State.
