Shell has announced today the sale of its onshore Nigerian subsidiary, the Shell Petroleum Development Company (SPDC), to the Renaissance Africa Energy Company comprised of ND Western, Aradel Energy (former Niger Delta E&P), First E&P, Waltersmith and Petrolin.
The deal is still subject to approvals by the Nigerian government and, if completed, would represent the biggest M&A for the country’s oil & gas sector. While many will see it as yet another exit by a major IOC from the Niger Delta, the transaction is a win for Africa’s local content development.
The Renaissance consortium comprises some of Nigeria’s most respected upstream companies with a demonstrated track record of redeveloping mature assets in the Niger Delta. The group already successfully came together in 2011 to incorporate ND Western and acquire SPDC’s 45% interest in OML 34.
Individually, each of Renaissance’s shareholders have also demonstrated an ability to operate in Nigeria and maximise domestic value creation. Aradel Holdings has grown an integrated oil, gas and refining business around Ogbele that has continued to expand over the years. Waltersmith follows a similar pattern as operator of the producing Ibigwe marginal field and the Ibigwe modular refinery. First E&P successfully commissioned the Anyala-Madu shallow water hub in 2020 and is working with Dangote on achieving first oil at the Kalaekule Field soon.
The transaction also includes continued support from Shell – operationally and financially – through the transition. This is critical to prevent past errors made during divestments in Nigeria with too little attention given to financial resources allocated to assets operations and redevelopment post completion of the deals.
Last but not least, Renaissance is set to become a critical player in Nigeria’s energy transition journey as it takes over some of the country’s biggest gas upstream and midstream assets. Nigeria is currently faced with a gas supply shortage that must be addressed to meet the objectives of the Decade of Gas which seeks to grow gas penetration and develop a gas-based economy that is more sustainable and spurs industrialization.
As Nigeria seeks to grow gas production, processing, and distribution, Renaissance will become a pillar of the country’s gas monetization strategy and a critical partner to the public and private sector players seeking to expand the country’s gas value-chain. In that regard, the appointment of Tony Attah, former Shell executive and Managing Director/CEO of Nigeria LNG for more than five years, to be Renaissance’s first MD/CEO is not insignificant.