AfrOil: Shell selling onshore Nigerian assets for up to $2.4bn

The UK-based super-major Shell has agreed to sell its subsidiary Shell Petroleum Development Co. (SPDC), which operates a group of onshore and shallow-water fields in Nigeria, to a consortium comprising mostly local energy players. Shell will continue offshore energy drilling in Nigeria, as well as producing LNG via its stake in Nigeria LNG (NLNG), following the sale.

Shell says that apart from the $1.3bn sale price, additional payments could reach $1.1bn, and estimates the total book value of SPDC at $2.8bn. The company is providing loans and other funding worth up to $2.5bn to help the Renaissance Africa Energy consortium finance the transaction and to support continued operations.

SPDC owns 30% of a joint venture that operates wells and pipelines and other installations in the Niger River Delta. Renaissance Africa Energy consists of four Nigerian companies – ND Western, Aradel Holdings Plc, First E&P and the Waltersmith Group – and Petrolin, a Swiss-based trading and investment company.