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

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The Nigerian government has disclosed that it will not approve the sale of Shell’s assets to the Renaissance Group
The $1.3 billion asset sale deal hit the wall when the Nigerian Upstream Petroleum Regulatory Authority said Renaissance lacks capacity
She disclosed that talks are still ongoing with NUPRC to agree on the final asset sale

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

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.

NURC declines approval

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.

NUPRC gives conditions to Shell

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.

Shell denies divestment moves

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.

Legit.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.

Nigerian billionaires behind Renaissance consortium

Legit.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.

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Source: Legit.ng

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