The Federal Government, through the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), has rejected Shell’s 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 report by Reuters.
Shell Petroleum Development Company (SPDC), which owns the assets, stated that it is cooperating with NUPRC and providing all necessary information required for the approval process.
“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 reached a preliminary agreement to sell its Nigerian onshore oil assets to a local consortium for over $1.3 billion, pending government approval. Zoe Yujnovich, Shell’s Integrated Gas and Upstream Director, emphasized the importance of the sale as part of Shell’s strategy to streamline its portfolio and focus on deepwater and integrated gas projects in Nigeria.
However, the NUPRC has imposed conditions on the sale, with its Chief Executive, Gbenga Komolafe, stating that the approval process would be expedited only if Shell agrees to take responsibility for oil spills and commits to financing environmental cleanup efforts in the Niger Delta. Komolafe noted that a faster approval process could be achieved if the companies agreed to these terms, while a longer-term option would involve waiting until NUPRC identifies and assigns all associated liabilities.
Meanwhile, residents of host communities have filed a N500 billion lawsuit against Shell, accusing the company of violating an existing Mareva injunction and seeking to halt the sale of its onshore assets.
