Nigerian Regulator Blocks $1.3bn Sale of Shell’s Onshore Oilfields Over Buyer’s Ineligibility

The Federal Government, through the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), has rejected the proposed $1.3 billion sale of onshore oilfields to the Renaissance Group, citing the buyer’s lack of qualification to manage the assets, according to a Reuters report.

Shell, which owns the assets via Shell Petroleum Development Company (SPDC), stated it was providing NUPRC with all necessary information.

Nevertheless, NUPRC declined to approve the sale on the grounds that the Renaissance consortium failed to demonstrate its ability to manage the assets, the report states.

The NUPRC has reportedly communicated its decision to all the involved 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.

In January, Shell Plc had reached an agreement to sell its Nigerian onshore oil assets to a local consortium for over $1.3 billion, pending government approval.

Shell’s Integrated Gas and Upstream Director, Zoe Yujnovich, confirmed the development, stressing that the transaction was an important step in the company’s strategy to streamline its portfolio and focus on deepwater and integrated gas projects in Nigeria.

However, the NUPRC has indicated that it will expedite approval only if Shell takes responsibility for oil spills and agrees to finance clean-up operations in the Niger Delta.

NUPRC’s Chief Executive, Gbenga Komolafe, explained that this would enable a quicker approval process as a short-term solution, provided the companies agree to these terms. The longer-term alternative would involve waiting until the NUPRC assigns all liabilities, Komolafe added.

Meanwhile, residents from the host communities have filed a N500 billion claim against Shell Petroleum Development Company, accusing the company of violating an existing “Mareva” injunction and seeking to block the sale of its onshore assets.