Shell, a prominent player in the Nigerian oil industry, is set to divest its Nigerian subsidiary, SPDC (Shell Petroleum Development Company of Nigeria Limited), known for its onshore oil production.

While the move signifies a partial withdrawal, Shell emphasizes its commitment to the Nigerian energy sector, pledging to remain a significant investor through its Deepwater and Integrated Gas divisions.

The buyer, a consortium comprising Renaissance (owned by ND Western, Aradel Energy, First E&P, Waltersmith, and Petrolin), already holds various productive assets in Nigeria. However, the completion of the deal is contingent upon approval from the federal government of Nigeria and meeting other specified conditions, according to Shell.

The transaction is valued at approximately $1.3 billion, covering SPDC's 15 licenses for production and exploration onshore, along with an additional 3 licenses in shallow waters in the Niger Delta.

Shell's history in Nigeria has been marred by challenges, including legal disputes. In one instance, 27 thousand residents attempted to claim damages from the company for an oil spill off the coast, though the High Court of London rejected the case.

In a similar move, Equinor, a Norwegian energy company, recently announced its exit from the Nigerian market after over 30 years of operation. The company sold its assets to Nigeria's Chappal Energies.

Despite being the 11th largest oil producer globally in 2022, Nigeria grapples with issues such as oil theft, vandalism, and inadequate infrastructure investment, hindering the industry's growth.

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