The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has reportedly rejected Shell International Plc’s proposed sale of its onshore assets to the Renaissance consortium in a deal valued at $1.3 billion. The rejection follows the need for regulatory approval under the Petroleum Industry Act (PIA).
Sources close to the matter revealed conflicting reports about the transaction’s status. While one source confirmed the NUPRC’s rejection, another suggested that the deal had a 70-30 chance of going through, especially with President Bola Tinubu’s support for its swift conclusion.
Shell had planned to divest its full stake in the Shell Petroleum Development Company of Nigeria Limited (SPDC) to Renaissance, which includes ND Western Limited, Aradel Holdings Plc, the Petrolin Group, FIRST Exploration and Petroleum Development Company Limited, and Waltersmith Group.
The NUPRC had previously established a divestment framework to assess applications for ministerial approval of such sales. This framework evaluates several factors, including technological expertise, financial standing, environmental remediation, and community relations. Renaissance must demonstrate its technical capability to manage the assets effectively.
The deal has been fraught with challenges, including a legal dispute between Shell and Global Gas and Refining Limited, which sought to prevent NUPRC from approving the sale. Shell clarified that it was transferring shares rather than directly selling the assets.
Additionally, concerns have been raised by a coalition of 40 NGOs, including Amnesty International, urging that the sale not proceed until Shell’s environmental liabilities are fully addressed. The Petroleum and Natural Gas Senior Staff Association of Nigeria also opposed the sale, citing unfamiliarity with Renaissance and raising various allegations against the consortium.
This complex situation highlights the challenges and regulatory hurdles involved in major asset transactions within Nigeria’s oil and gas sector.