The Shell Petroleum Development Company of Nigeria Limited (SPDC) has received official ministerial consent to sell its onshore oil business in Nigeria to Renaissance Africa Energy Company Limited, marking a major milestone in the multinational’s strategic transition within the country.
Renaissance Africa Energy confirmed the development in a statement released on Wednesday, emphasizing that the approval represents a major step forward in executing the Sale and Purchase Agreements (SPAs) initially announced in January 2024.
“Renaissance Africa Energy Company 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. This approval marks a significant step forward from the announcement of the Sale and Purchase Agreements in January 2024,” the company said.
Years in the Making: A Deal Worth $2.4 Billion
The landmark deal between Shell and Renaissance — a consortium of five energy firms — has been in the pipeline for several years, delayed by a range of obstacles including litigation, environmental liabilities, sabotage, and oil theft.
Under the terms of the agreement, SPDC is set to receive up to $2.4 billion, comprising an initial payment of $1.3 billion and an additional $1.1 billion for pre-existing receivables and cash balances. This second tranche is expected to be paid at the final closing of the deal.
The transaction marks a significant relief for Shell, which has attempted since 2021 to offload these onshore assets due to the increasing difficulty of operating them profitably and safely. Issues such as pipeline vandalism, oil spills, and legal challenges have taken a toll on Shell’s operations and reputation in the region.
Shell Refocuses on Offshore Exploration
Despite the divestment, Shell has reiterated that it is not exiting the Nigerian market. Instead, the company is redirecting its operational focus and future investments towards deep offshore exploration and production, where it believes it has a competitive edge in technology and scale.
Osagie Okunbor, the Managing Director of SPDC and the Country Chair of Shell Companies in Nigeria, reaffirmed this shift in strategy:
“Shell is not leaving Nigeria. We are shifting our portfolio to focus on deepwater assets where our technological and financial capabilities provide a strong advantage.”
This strategic realignment is consistent with Shell’s global push toward streamlining its operations and investing in lower-carbon and higher-efficiency assets.
New Era for Nigeria’s Onshore Oil Industry
The acquisition by Renaissance Africa Energy Company Limited introduces a fresh chapter for Nigeria’s onshore oil sector. With local and regional companies expected to play a larger role, the deal is also being viewed as a step forward in increasing indigenous participation and revitalizing the domestic energy landscape.
Industry watchers say this move may encourage further divestments by other international oil companies (IOCs), potentially opening up new opportunities for local firms to acquire and manage existing infrastructure.
The SPDC divestment is more than just a business transaction — it signals a paradigm shift in how oil and gas operations are conducted in Nigeria, with long-term implications for energy security, environmental responsibility, and economic empowerment.
