Aradel Holdings Plc, a member of the Renaissance Africa Energy Limited (RAEC) consortium, has announced that Renaissance Energy has received approval from the Minister of Petroleum Resources to acquire Shell Petroleum Development Company (SPDC).
Renaissance Energy’s Acquisition of Shell
The acquisition of Shell by Renaissance Energy was initially announced in January 2024. At the time, Aradel Holdings described the transaction as a significant milestone that would deliver substantial benefits to shareholders, strengthen the company’s financial outlook, and consolidate its strategic position in Nigeria’s energy market.
The deal, valued at over $1.3 billion, involves the sale of Shell’s onshore Niger Delta oil business to Renaissance Energy. The assets to be acquired include an estimated 6.73 billion barrels of oil and condensate, as well as 56.27 trillion cubic feet of associated and non-associated gas.
Delays in Approval
Although the transaction was completed in January, regulatory approval faced significant delays. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) initially withheld approval due to ongoing lawsuits and allegations against Shell Nigeria involving human rights abuses and environmental degradation in the Niger Delta region.
The NUPRC stipulated that approval would only be granted if Shell assumed responsibility for oil spills and committed to funding cleanup efforts in the affected areas.
Concerns heightened in October when the federal government approved several other divestment deals, including: Mobil Producing Nigeria Limited’s divestment to Seplat Energy Offshore Limited, Equinor Nigeria Energy Company Limited’s divestment to Project Odinmin Investments Limited, TotalEnergies EP Nigeria Limited’s divestment to Telema Energies Nigeria Limited, and Nigerian Agip Oil Company Limited’s divestment to Oando Petroleum and Natural Gas Company Limited.
However, the Renaissance-Shell deal remained unapproved, leading to uncertainty. To address these concerns, Olu Verheijen, the special adviser to the president on energy, assured stakeholders that the issues surrounding the sale would soon be resolved.
Eventual Approval
On December 18, 2024, the Federal Government granted approval for the deal after Heineken Lokpobiri, the Minister of State for Petroleum Resources (Oil), gave his consent.
Announcing the approval, Tony Okonedo, spokesperson for Renaissance Africa Energy Limited, remarked:
“This is a momentous achievement for Renaissance. We are committed to leveraging our expertise and resources to drive the growth of Nigeria’s energy industry and contribute to the nation’s economic development.”
He further stated, “This approval marks a significant step forward from the announcement of the Sale and Purchase Agreements in January 2024.”
What Next?
The approval of the Renaissance-Shell acquisition represents a transformative step for Nigeria’s energy sector, particularly in increasing local participation in the industry.
Once the official announcement is made, Renaissance Energy is expected to take over these assets. This scaled-up production capacity will play a pivotal role in achieving Nigeria’s goal of producing 2 million barrels of oil per day (2mbpd).
