Shell Agrees to Sell Nigerian Onshore Subsidiary, SPDC for $2.4bn

Shell has announced its decision to sell its Nigerian onshore subsidiary, The Shell Petroleum Development Company of Nigeria Limited (SPDC), to a consortium of five companies for a total of $2.4 billion.

The sale marks the end of Shell’s nearly century-long operations in Nigeria’s onshore oil and gas sector.

The consortium comprises four exploration and production companies based in Nigeria, including ND Western, Aradel Energy, First E&P, and Waltersmith, as well as an international energy group, Petrolin.

The deal is subject to approval by the Nigerian government, which holds a 55% stake in SPDC.

Under the terms of the agreement, Shell will receive $1.3 billion upon completion of the transaction, with an additional payment of up to $1.1 billion related to prior receivables.

The company will retain a role in supporting the management of SPDC joint venture facilities that supply a major portion of the feed gas to Nigeria LNG (NLNG).

The decision to sell the onshore subsidiary aligns with Shell’s strategy to exit onshore oil production in the Niger Delta, simplifying its portfolio and focusing future investment in Nigeria’s Deepwater and Integrated Gas positions.

The sale of SPDC comes after years of challenges faced by Shell in Nigeria’s onshore oil and gas sector, including spills, theft, sabotage, and operational difficulties.

The company’s exit from this sector could have significant implications for Nigeria’s energy landscape and the local companies that are set to take over Shell’s onshore operations.