The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has denied Shell International Plc’s attempt to sell its onshore assets to Renaissance for $1.3 billion.
According to sources familiar with the situation, the transaction, which required approval from the regulatory commission as stipulated by the Petroleum Industry Act (PIA), was turned down, as reported by the Africa Report.
However, a source reported on Monday that there was still a 70/30 chance of the deal proceeding, with President Bola Tinubu pushing for its closure soon.
“I’m not aware of this particular news. This morning, we received information indicating a 70-30 assurance that the sale will go through.
The President is also keen on the sale and is working to ensure it happens swiftly. This is the information we received this morning,” the source said.
Previously, Shell announced plans to sell its full stake in the Shell Petroleum Development Company of Nigeria Limited (SPDC) to Renaissance, a consortium that includes ND Western Limited, Aradel Holdings Plc, the Petrolin Group, FIRST Exploration and Petroleum Development Company Limited, and Waltersmith Group.
In April, the NUPRC introduced a divestment framework to assess applications for ministerial approval of Shell’s divestment plans.
Gbenga Komolafe, NUPRC’s CEO, stated that this framework covers aspects such as technical expertise, financial stability, legal compliance, decommissioning and abandonment procedures, environmental remediation, labor relations, data repatriation, and host community trust.
He also emphasized that Renaissance must demonstrate its technical ability to manage the assets effectively.
Between January and August 2024, the deal’s value decreased from $2.4 billion to $1.3 billion.
These assets have been the subject of a legal dispute between Shell and the local firm Global Gas and Refining Limited, which has sought a court injunction to prevent NUPRC from approving the sale.
Local reports suggest that both companies have had several disagreements over contractual obligations.
In response to Global Gas’ objections, Shell clarified that it was not directly selling the onshore assets to Renaissance for $1.3 billion but was transferring shares.
Meanwhile, a coalition of 40 NGOs, including Amnesty International, has raised concerns about the transaction, urging that the sale not be approved until Shell’s environmental impact has been thoroughly assessed.
Similarly, the Petroleum and Natural Gas Senior Staff Association of Nigeria opposed the sale of Shell’s onshore assets, stating that the consortium, Renaissance, was unfamiliar to them and raising several allegations.
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