October 21, 2024

Nigeria has blocked the sale of Shell’s entire onshore and shallow-water oil and gas assets in the Niger Delta, the country’s upstream regulator said on Monday, roughly 10 months after the deal was announced.

In a speech at an event in the capital Abuja, Nigerian Upstream Petroleum Regulatory Commission (NUPRC) CEO Gbenga Komolafe said the Shell deal “could not scale (the) regulatory test,” without elaborating.

A Shell spokesperson did not immediately respond to a request for comment.

Shell said in January that it had reached an agreement to sell its onshore oil and gas assets to the Renaissance consortium of five companies for up to $2.4 billion, allowing it to focus on deepwater and integrated gas investments.

The assets hold a combined estimated volume of 6.73 billion barrels of oil and condensate and 56.27 trillion cubic feet of associated and non-associated gas.

In trying to exit the oil-rich Niger Delta, Shell follows other oil majors Exxon Mobil, TotalEnergies and Eni  who wanted to do so because of security concerns.

Environmental activists and some communities opposed the Shell-Renaissance deal, tying Shell into a string of lawsuits for environmental restoration and compensation for land and rivers damaged by historical oil spills.

In April, the NUPRC started evaluating Shell’s divestment to the consortium, which comprises four Nigerian exploration and production companies and an international energy group.

REUTERS