– Signaling new era for local firms
Lagos — The Nigerian government has granted approval to Shell for the sale of $2.4 billion in onshore and shallow-water assets to Renaissance Group, according to a statement by Renaissance.
The approval marks the end of Shell’s nearly a century of operations in Nigerian onshore oil and gas and is part of a broader retreat by western energy companies from Nigeria, including US company Exxon Mobil, Italy’s Eni and Norway’s Equinor. \
The regulator had cited Renaissance’s inability to demonstrate its capacity to manage the assets, which hold an estimated 6.73 billion barrels of oil and condensate, and 56.27 trillion cubic feet of gas.
The NUPRC and Shell did not immediately respond to requests by Reuters for comment.
Renaissance said: “this approval marks a significant step forward from the announcement of the sale and purchase agreements in January”.
This week, Shell announced its Nigerian subsidiary had made a final investment decision on Bonga North, a deep-water project off the coast of Nigeria.
The project, which will help maintain oil and gas production at Bonga, will be connected to Shell’s Floating Production Storage and Offloading facility, where the oil company has a 55% stake.
The monumental asset sale to one of Africa’s foremost energy companies, Renaissance, exemplifies Nigeria’s wholehearted confidence in its home-grown companies. Renaissance is a consortium that includes ND Wester Ltd.; Aradel Holdings Plc; Petrolin Group; FIRS Exploration and Petroleum Development Co.; and Waltersmith Group, all leading companies that efficiently operate a diverse mix of oil and gas assets with a focus on socioeconomic impact in Nigeria.
The move signals that Nigeria is living up to the promises made by Heineken Lokpobiri, the country’s Minister of State for Petroleum Resources (Oil), as well as Nigeria’s Presidential Advisor for Energy Olu Verheijen, during this year’s African Energy Week: Invest in African Energies conference.
During the event, both Minister Lokpobiri and Verheijen underscored the significant potential available in Nigeria and the vital need to increase investment and local participation across the sector. The Shell- Renaissance deal reflects the country’s ambitions to drive exploration and production and is poised to consolidate the consortium’s role as a major player in the market.
As the government targets a $10 billion investment pipeline in the oil and gas industry, this $1.3 billion deal will undoubtedly contribute immensely to Nigeria’s aim of enhancing its oil and gas production capacity, as well as the beneficiation of local companies.
In recent years, Nigeria has prioritised the implementation of policies that do just that, with a view to promoting gas monetisation and the development of untapped oilfields. Deals such as these form the basis of Nigeria’s proactive regulatory landscape that serves to enhance the country’s competitiveness as an oil and gas investment destination.
Targeting four million barrels a day, Nigeria’s new Petroleum Industry Act, signed into law in 2021, incentivises new exploration by streamlining license procedures, simplifying processes and extending the duration of third-party contracts. Meanwhile, a series of reforms implemented since 2023 have been forged to improve energy security, attract capital, improve cash flows and deepen collaboration with strategic partners. With these, the country is well positioned to develop and expand its oil and gas infrastructure, support the development of new concessions and unlock billions of dollars of new investment.
The African Energy Chamber, AEC, the voice of the African energy sector, wholly supports the Nigerian government’s commitment to improving the role local companies are playing in the country’s hydrocarbons sector.
According to NJ Ayuk, Executive Chairman of the AEC, the Chamber is wholeheartedly supportive of the Nigerian government’s commitment to supporting local companies operating in the oil and gas sector.
“Nigeria is continuing its focus on becoming a leading force in the global energy market, and this approval is poised to steadily improve the positive impact the industry will have on domestic companies operating in the country. We look very much forward to seeing what Renaissance has in store, not just for Nigeria’s energy sector, but for the broader growth of socioeconomic development in the West African region,” Ayuk stated.
This article was originally posted at sweetcrudereports.com
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