Report: NUPRC has not approved $1.3bn Shell Renaissance deal

Contrary to reports in a section of the media that the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, has accepted Shell International Plc’s bid to sell its onshore assets to Renaissance in a transaction worth $1.3bn, investigations have revealed that the Commission has not approved the transaction.

There had been reports quoting senior government sources that the transaction, which involves Shell’s 75-year-old onshore assets to Renaissance – a consortium of four exploration and production companies in Nigeria and an international energy group – had got the green light from the regulatory commission as required by the Petroleum Industry Act.

The report had claimed that the deal still requires the final approval of President Bola Tinubu, who currently holds the portfolio of minister of petroleum resources.

“NUPRC has approved the sale and made the recommendation to the minister of petroleum for approval. This is on the minister’s table. All ‘next steps’ await the minister’s consent,” the report had quoted a senior government to have said.

But, investigations by thewhistler.ng revealed that contrary to the report, the NUPRC has not approved the divestment deal.

Top government officials with knowledge of the deal stated that the report was done to pre-empt the decision of the NUPRC, following the statement issued three weeks ago by the regulator on some of the ongoing divestment deals.

In the statement issued by the NUPRC on August 26, the Commission had listed the ongoing divestments to include the NAOC-Oando and Equinor–Chappal and Seplat-Mobil Producing Nigeria Unlimited (MPNU).

It was revealed that the decision of the Commission, not to mention the Shell-Renaissance transaction, was because a final decision had not been taken on the matter.

One of the sources stated that the Commission will make its final position on the Shell-Renaissance divestment deal known to the public in due course.

The source said, “The report (in some section of the media) was planted to put pressure on the Commission. When the NUPRC gave the status report on the divestment by IOCs, it left the Shell and Renaissance deal out.

“So, the report that was planted in the media is to arm-twist the regulator by making people believe that it has approved the deal and it is not true.”

Another source in the commission stated that the Commission has already communicated its position on the deal to Shell.

The source said, “Shell knows the position of the regulator on this matter. The commission has communicated to Shell on the deal.”

It was further gathered that one of the reasons why the deal has not sailed through is that there are barrage of petition against Shell on the issue of environmental degradation.

A coalition of Civil Society Organisations (CSOs) had called on the federal government to disapprove the planned divestment of Shell Petroleum Development Company (SPDC) and sale of its onshore facility until the concerns of environmental challenges and livelihood loss it created in the Niger Delta are tackled.

The Africa Network for Environment and Economic Justice (ANEEJ) and 46 other CSOs at a meeting, held in Port Harcourt had stated that despite stakeholders’ outcry and calls by communities and other stakeholders for urgent action by oil companies to address the problem, very little was being done to address the problem.

Speaking on the development, a stakeholder in the Niger Delta said that many groups from the region had submitted petitions against the divestments of Shell following issues of environmental degradation.

The stakeholder said, “There is a barrage of petititons on environmental issue that involve the divestments of Shell. We have submitted petitions against Shell to the NUPRC faulting the deal with Renaissance, and these are huge issues that the Commission must look at when considering the deal. There is even a court matter on the environmental degradation in the Niger Delta, but I won’t want to talk more because it’s sub-judice.”

When contacted, the NUPRC Head of Public Affairs Unit, Mrs. Olaide Shonola, she said the Commission will make its final position on the deal known in due course.

The NUPRC had three weeks ago given an update on the conduct of the divestments of IOC assets in Nigeria.

The regulator had said it is conducting all divestments in line with international standards.

The NUPRC said ongoing divestments are the NAOC-Oando and Equinor–Chappal and Seplat-Mobil Producing Nigeria Unlimited (MPNU).

NUPRC said, “As the public may be aware, ministerial approval was recently granted to the divestment by NAOC to Oando Petroleum and Natural Gas Company Limited (Oando PNGCL) and OANDO Oil II Cooperatief U.A. (OANDO Cooperatief) (together the “Oando Entities”) and by Equinor Nigeria to Chappal Energies.

“The commission wishes the public to be aware that the approvals given to the NAOC-Oando and Equinor–Chappal divestments were in accordance with the Petroleum Industry Act (PIA) 2021, defined regulatory framework, and standard consent approval process set by the commission under the PIA.

“The commission wishes to assure the public that the process for approving divestment applications is guided by the provisions of the PIA and clearly defined frameworks in the assignment regulations, guided by international best practices.”

Shell had in January announced that it had reached an agreement to sell its onshore assets in the Niger Delta region to Renaissance and focus on deepwater and integrated gas investments.

The buyer, the Renaissance consortium, comprises ND Western, Aradel Energy, First E&P, Waltersmith, all local oil exploration and production companies, and Petrolin, a Swiss-based trading and investment company.