Shell has decided to sell The Shell Petroleum Development Company of Nigeria (SPDC), which owns onshore oil assets in Nigeria’s Niger Delta region, to a consortium comprising mostly local energy players.

The consortium includes ND Western, Aradel Holdings, First E&P, the Waltersmith Group, Petroleum Development Company and Petrolin.

The transaction is measured at $1.3 billion, with further payments of up to $1.1 billion set to be made. The sale will come into effect following the relevant approval from government.

The African Energy Chamber (AEC) strongly urges the government to take a fast-tracked approach to approving the deal.

Delaying the transaction will only impact the growth of the industry, and Nigeria stands to serve as an example of how the transfer of oil assets from an international major to local players can advance the industry.

The SPDC operates and supplies onshore and shallow water oil and gas to domestic and export markets.

The company currently supplies about 10 per cent of Nigeria’s domestic natural gas as well as operates a network of 3,173 km of flow-lines and pipelines.

SPDC also has 263 producing oil wells, 56 producing gas wells, six gas plants, two major oil export terminals and one power plant.

All of these assets are held through its Joint Venture with the Nigerian National Petroleum Corporation, TotalEnergies and the Nigerian Agip Oil Company.

For Shell, the transaction of these assets allows the British multinational to focus its attention on other critical assets within its portfolio. The company is looking at increasing investments in the Bongo and Erha fields – where nearly one-third of the country’s deepwater production is derived. Through the transaction, greater focus, capital and time can be given to these assets, resulting in both a more profitable and productive future for Shell in Nigeria.

"This agreement marks an important milestone for Shell in Nigeria," Shell’s Integrated Gas and Upstream Director Zoe Yujnovich, explained, adding that the deal is "simplifying our portfolio and focusing future disciplined investment in Nigeria on our deepwater and integrated gas positions."

In addition to ensuring the continuous development of fields and infrastructure, the acquisition showcases the capacity of domestic Nigerian companies and will lead to enhanced job creation, revenue generation and technology transfer for the consortium itself.

SPDC will also benefit from the expertise and experience of the local players, improving risk mitigation and greater social responsibility.