A consortium of leading oil companies, including Waltersmith Group led by Nigerian businessman Abdulrazaq Isa has reached an agreement to acquire Shell Plc’s onshore oil business in Nigeria for $2.4 billion — it marks a shift in the Nigerian oil industry and signifies Shell’s strategic retreat from the challenging operating environment in the Niger Delta region.
The deal aligns with Shell’s long-term strategic objective to exit the onshore oil business in the Niger Delta, which has been plagued by security issues, environmental concerns, and community unrest.
Shell will receive an initial payment of $1.3 billion, with potential additional payments of up to $1.1 billion contingent on future developments, bringing the total potential value of the transaction to $2.4 billion.
Rising stars and established giants: Unveiling the alliances within Renaissance consortium
The consortium, aptly named Renaissance, represents a mix of established and rising players in the Nigerian oil sector. Notably, Waltersmith Group, led by Nigerian businessman Abdulrazaq Isa, brings extensive experience in oil exploration and production.
Other consortium members, including ND Western, First E&P, and Aradel Energy, also hold strong positions in the local market. Petrolin, the oil conglomerate of Gabonese oil tycoon Samuel Dossou-Aworet, adds international expertise and financial muscle to the group.
Strategic pivot: Shell shifts Nigeria’s investments to deepwater and integrated gas ventures
Shell plans to redirect its investments in Nigeria towards deepwater and integrated gas ventures, areas it deems more strategically vital and commercially viable. In a statement, Shell’s Integrated Gas and Upstream Director, Zoe Yujnovich, emphasized the deal’s role in streamlining Shell’s portfolio and enabling “disciplined investment” in these key areas.
The sale process, however, wasn’t without its challenges. In 2022, a court ruling temporarily halted the divestment plans due to ongoing litigation related to pollution allegations. Nonetheless, the parties persevered, and the deal eventually reached fruition.
Subject to regulatory approval by the Nigerian government, the transaction is expected to close in the coming months. This landmark deal opens a new chapter, with Renaissance now poised to take on a leading role in onshore oil production in the country.