The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has accepted Shell International Plc’s bid to sell its onshore assets to Renaissance in a transaction worth $1.3 billion.
As required by the Petroleum Industry Act (PIA), the regulatory commission approved the sale of Shell’s 75-year-old onshore assets to Renaissance, a consortium comprising four Nigerian exploration and production companies and an international energy group. Senior government sources confirmed this to rapidospace news.
If this deal goes through, it will boost Nigeria’s oil output, improve government oil revenue, strengthen the naira, and expedite government ambitions for gas development.
The deal, however, still requires the final approval of President Bola Tinubu, who currently holds the portfolio of minister of petroleum resources.
“NUPRC has approved the sale and made the recommendation to the minister of petroleum for approval. This is on the minister’s table. All ‘next steps’ await the minister’s consent,” a senior government source said.
“As you know, the minister, who doubles as president, has been out of the country,” stated a second senior government source. The minister’s authorization is still awaiting approval, therefore all next steps, including statutory payments, must wait.
Beginning in the 1930s, the British energy giant was a pioneer in the oil and gas industry in Nigeria. Due to theft, sabotage, and other operational challenges, it has suffered for years with hundreds of onshore oil spills, which resulted in expensive fixes and high-profile litigation.
In January, Shell declared that it had come to a deal with Renaissance to sell its onshore Niger Delta assets, with the aim of concentrating on deepwater and integrated gas operations.
The buyer, the Renaissance consortium, comprises ND Western, Aradel Energy, First E&P, Waltersmith, all local oil exploration and production companies, and Petrolin, a Swiss-based trading and investment company.
Sources said Shell executives have promised to assist in speedily developing Bonga assets, support an increase in oil production and accelerate the government’s plans for gas development if the Shell/Renaissance deal sees the light of the day.
“They want to put $7 billion down to develop Bonga and in three years help local operators develop an additional 300,000 barrels per day (bpd) to 500,000 bpd. They also want to stake partnership to ensure that the gas part of the deal is quickly done to benefit Nigeria,” one of the senior government sources told BusinessDay.
Efforts to reach Olaide Shonola, head of public affairs at NUPRC, via calls or messages proved abortive as at the time of writing these reports.
Implications for Bonga
The recent deal is anticipated to bring a fresh wave of energy into Nigeria’s oil and gas sector. However, experts are meticulously analyzing its potential effects on Bonga’s production and development plans.
Bonga, Nigeria’s pioneering deepwater oil field, currently has the capacity to produce 225,000 barrels per day (bpd) of crude oil and 150 million standard cubic feet (scf) per day of gas, which supplies the Nigeria Liquefied Natural Gas (NLNG) plant at Bonny.
The development of Bonga Southwest was projected to add approximately 1 billion barrels to Nigeria’s oil reserves. Shell had outlined a plan to advance the Bonga Southwest project in three phases, with a total anticipated yield of 3.2 billion barrels.
The output from this field was a key component in Nigeria’s strategy to increase production to around 3 million bpd by 2023, according to officials from the Nigerian National Petroleum Company (NNPC).
