The Nigerian government has officially rejected Shell's plan to sell its onshore oil business in Nigeria to Renaissance Africa Energy Company Limited.
This decision was confirmed by Gbenga Komolafe, the Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), during the launch of the "Project One Million Barrels of Oil Per Day" initiative in Abuja.
The proposed $1.3 billion deal, which included an additional $1.1 billion contingent on the sale's completion, failed to pass regulatory scrutiny.
Komolafe explained that out of five divestment applications submitted for approval, only four received ministerial consent, while Shell's proposal was rejected. The rejection was primarily due to the consortium's lack of capacity to manage the assets effectively.
The NUPRC found that the group of companies did not have the requisite qualifications, as they were not managing their current assets up to 50 percent capacity. Concerns were also raised about the transparency of the seller financing model and the ultimate beneficiaries of the companies involved, as they were registered in tax havens abroad.
Despite this setback, Shell reiterated its commitment to Nigeria, with Osagie Okunbor, Managing Director of Shell Petroleum Development Company (SPDC), stating that the company would focus more on deep offshore operations.
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