The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has rejected Shell International Plc’s proposed $1.3 billion sale of its onshore assets to Renaissance, according to sources cited by Africa Report. The transaction, which required regulatory approval under the Petroleum Industry Act (PIA), faced significant hurdles that led to its denial.
Sources indicated that, as of Monday morning, the deal was perceived to have a 70% likelihood of proceeding due to President Bola Tinubu’s involvement, which is aimed at expediting the sale. A source familiar with the matter stated, “We were informed this morning that there is a 70-30 chance the sale will proceed. The President is keen on pushing the deal through swiftly.”
Despite this optimism, NUPRC’s rejection reflects ongoing concerns. The deal’s valuation dropped significantly from $2.4 billion to $1.3 billion between January and August 2024, potentially influenced by legal challenges and regulatory scrutiny.
The assets in question are embroiled in a legal dispute with local firm Global Gas and Refining Limited, which has sought a court injunction to block the sale. Reports suggest that disputes over contractual obligations are central to the conflict between Shell and Global Gas.
Shell has clarified that the transaction involves transferring shares rather than a direct sale of the assets to Renaissance. However, this clarification has not fully alleviated concerns.
A coalition of 40 non-governmental organizations, including Amnesty International, has voiced strong opposition to the sale. They are calling for a comprehensive environmental assessment of Shell’s impact before any approval is granted.
Additionally, the Petroleum and Natural Gas Senior Staff Association of Nigeria has opposed the transaction, citing unfamiliarity with the Renaissance consortium and allegations surrounding it.,
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The sale of Shell’s onshore assets remains uncertain as it faces legal, regulatory, and environmental scrutiny. The NUPRC’s decision and the ongoing disputes highlight the complex landscape of Nigeria’s oil sector transactions.
