FG reveals why it rejected Shell's $1.3 billion asset sale to another firm

The Nigerian government, via the Nigerian Upstream Petroleum Regulatory Authority (NUPRC), has rejected the proposed $1.3 billion sale of onshore oilfields to the Renaissance Group, citing the buyer’s lack of capacity to manage the assets. 

The asset owner, Shell, disclosed that it was furnishing the regulator with the required information.

However, the NUPRC declined to approve the sale, saying that the Renaissance Group could not prove it could manage the assets.

Reuters reports that the NUPRC has communicated its final decision to all the parties.

In January this year, Shell Plc agreed to sell its Nigerian onshore oil assets to a local consortium for over $1.3 billion.

According to reports, Shell’s Zoe Yujnovich confirmed the development, stressing the transaction’s importance to streamlining its portfolio and investments in deepwater gas projects in Nigeria.

However, NUPRC stated that it will only speed up the approval if Shell accepts responsibility for oil spills and commits to financing cleanup in the Niger Delta.

Gbenga Komolafe, NUPRC’s chief executive, explained that the move would allow for a quicker approval process as a short-term option if the firms agree to the conditions.

TimesNow.com.ng earlier reported that Shell said its asset sale in Nigeria did not mean divestment or leaving the country but a strategic move to offload its onshore assets.

Shell announced it had reached an agreement with Renaissance Africa Energy to take over its oil business in Niger Delta 

The announcement triggered reactions on various social media platforms, with many Nigerians expressing the opinion that Shell was leaving the country after having been in active service since 1937. 

Responding to the rumours, Shell categorically stated that there is no plan to leave Nigeria, contrary to insinuations and Punch reports.

TimesNow.com.ng previously reported that a consortium of top oil companies, including Waltersmith Group led by Nigerian businessman Abdulrazaq Isa, has finalised an agreement to acquire Shell’s onshore oil business in Nigeria for $2 billion.

The deal marks a shift in the Nigerian oil industry, signifying Shell’s planned withdrawal from the challenging operating environment in the Niger Delta area.

The deal marks a shift in the Nigerian oil industry, signifying Shell’s planned withdrawal from the challenging operating environment in the Niger Delta area.

Source: TimesNow.com.ng