Shell officially quits Niger Delta as Renaissance oil deal closes

The Renaissance consortium of mostly Nigerian companies has completed its takeover of Shell's onshore and shallow water oil business in Nigeria, signalling the end of an era for an early pioneer of the country's oil sector.

In a statement late March 13, Renaissance said it had closed the transaction and renamed the Shell Petroleum Development Company (SPDC) to Renaissance Africa Energy Company Limited.

"We are extremely proud to have completed this strategic acquisition," Renaissance said, adding that its vision was to be "Africa's leading oil and gas company, enabling energy security and industrialization in a sustainable manner."

"We and our shareholder companies are therefore pleased that the Federal Government has given the green light for this milestone acquisition in line with the provisions of the Petroleum Industry Act," it added.

Shell confirmed the deal's closure in a statement March 13.

"The divestment of SPDC aligns with Shell's intent to simplify its presence in Nigeria through an exit of onshore oil production in the Niger Delta and a focus of future disciplined investment in its Deepwater and Integrated Gas positions," it said.

The Nigerian government last December approved Shell's sale of its 30% stake in 15 onshore oil and gas licenses and three in shallow water, in a deal worth up to $2.4 billion.

Renaissance, which comprises Nigerian companies ND Western, Aradel Energy, First E&P, and Waltersmith, and international group Petrolin, were to make an additional payment at completion of up to $1.1 billion, which related to prior receivables and cash balances in the business, the deal stipulated.

SPDC production at the time of purchase in January 2024 averaged roughly 100,000 b/d of oil equivalent, according to sources. Other stakeholders in SPDC are state-owned Nigerian National Petroleum Company with 55%, TotalEnergies with 10% and Agip Energy and Natural Resources with 5%.

The divestment by Shell from its onshore and shallow waters oil assets in Nigeria followed similar moves by US major ExxonMobil and Italian giant Eni, although the Anglo-Dutch major was an early driver of oil development in the Niger Delta in the 1950s. Initially, the divestments faced regulatory hurdles and in some cases official opposition.

Following years of crude theft, sabotage and spills in the restive region, international oil companies are now looking to focus on Nigeria's deepwater offshore oil provinces.

Nevertheless, the Nigerian government has expressed its hopes that the takeover of the mature onshore oil fields by indigenous companies would bolster Nigeria's oil output by reviving abandoned wells and improving ties with local communities.

The head of the Nigerian Upstream Petroleum Regulatory Commission, the industry regulator, Gbenga Komolafe, said Jan. 14 that the commission had set an oil production target of 2.1 million b/d for 2025, to be achieved through the combination of improved security measures, new investments in the oil sector and the development of new oil fields.

Nigeria has the capacity to produce more than 2.2 million b/d of crude but pumped 1.47 million b/d in February, according to government data.