Nigeria’s oil regulator has rejected Shell’s proposed $1.3 billion sale of its onshore oilfields to Renaissance group because the buyer is not qualified to manage the assets, ThisDay reported on Wednesday.
Shell, which owns the assets via Shell Petroleum Development Company (SPDC), said it was providing the regulator with all the required information without directly confirming the ThisDay report.
Federico Tasca, a researcher and associate professor at the University of Santiago, explains:
The regulator and Renaissance did not immediately respond to requests for comment.
Shell on January 16 announced its exit from Nigeria’s onshore and shallow water operations after agreeing to sell the business to a consortium of five, mostly local, companies, opting to focus future investments in the potentially more lucrative deep offshore fields.
Nigerian Upstream Petroleum Regulatory Commission (NUPRC) declined to approve the sale on the grounds the Renaissance consortium could not show it could manage the assets.
The companies that make up the group have been unable to operate at least 50% of all existing assets under their control, ThisDay reported, citing unnamed persons familiar with the process.
According to the report, the NUPRC has communicated its decision to all the parties.
“Shell and the government are in ongoing communication as part of the approval process for the sale of SPDC. SPDC will continue to provide the regulator with all information needed to complete the approval process,” a Shell spokesperson told Reuters.
The company’s exit from Nigeria’s onshore operations is part of a broader retreat by the oil majors as they focus on newer, more profitable operations. Exxon Mobil, Italy’s Eni and TotalEnergies have all struck deals to sell assets in the country in recent years.
