Nigeria has halted Shell’s efforts to sell its entire onshore and shallow-water oil operations, while simultaneously granting approval for a similar transaction involving Exxon Mobil. The announcement was made by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) on Monday.
Shell’s proposed asset sale, valued at up to $2.4 billion and involving the Renaissance consortium, was first disclosed in January. Meanwhile, Exxon’s agreement with Seplat Energy has been awaiting regulatory approval for over two years since the announcement of a $1.28 billion fee in February 2022.
During a recent address in Abuja, Gbenga Komolafe, CEO of NUPRC, stated that Shell’s deal “could not pass the regulatory test,” though he did not provide further details. In contrast, Exxon’s transaction has received the necessary ministerial approval. President Bola Tinubu indicated on October 1 that the Exxon-Seplat deal would soon receive ministerial consent following clearance from regulators.
Exxon expressed satisfaction with the regulatory announcement, looking forward to obtaining the final ministerial approval to finalize the sale. A spokesperson for Shell did not immediately respond to requests for comment.
The rejection of Shell’s sale marks a significant setback for the company’s strategy to transition toward deepwater investments, highlighting the growing challenges faced by oil firms in Nigeria. Major oil companies operating in the country, Africa’s largest oil exporter, have been withdrawing from onshore operations due to issues such as theft and sabotage, focusing instead on more lucrative deep offshore fields.
The Shell assets are estimated to hold approximately 6.73 billion barrels of oil and condensate, along with 56.27 trillion cubic feet of associated and non-associated gas. Under the approved agreement, Seplat will acquire 40% of four oil mining leases and associated infrastructure, including the Qua Iboe export terminal, and will own 51% of the Bonny River natural gas liquids recovery plant, previously operated by Exxon’s local subsidiary.
Shell’s exit from the Niger Delta aligns with similar actions taken by Exxon Mobil, TotalEnergies, and Eni, all of which have sought to divest due to security concerns. In July, NUPRC approved the sale of onshore assets by Eni’s local unit to Oando, as well as a deal from Equinor to newcomer Project Odinmim.
Environmental activists and local communities have opposed the Shell-Renaissance deal, linking the company to numerous lawsuits over environmental damage and the need for restoration and compensation for land and waterways affected by oil spills. In April, NUPRC began evaluating Shell’s divestment proposal to the consortium, which consists of four Nigerian exploration and production companies and one international energy group.
