NUPRC denies approval of $1.3bn Shell-Renaissance divestment deal

Contrary to recent media reports, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has not yet approved Shell International Plc’s $1.3 billion sale of its onshore assets to the Renaissance consortium. Investigations have revealed that the regulatory body has not granted the required consent for the transaction, as previously reported by some sources.

The deal, which involves Shell’s 75-year-old onshore assets, was rumoured to have received NUPRC’s endorsement and was awaiting the final approval of President Bola Tinubu, who also holds the portfolio of Minister of Petroleum Resources. However, senior government officials with knowledge of the matter have clarified that no such approval has been granted by the NUPRC.

A recent report claimed that the regulatory commission had already recommended the transaction to the minister for final consent. However, sources within the government have disclosed that the media reports were planted to pressure the NUPRC into making a hasty decision. According to these sources, the regulator’s omission of the Shell-Renaissance deal in its latest divestment update was deliberate, as the Commission had not made a final determination.

“The report was an attempt to arm-twist the regulator. The NUPRC has not approved the Shell-Renaissance deal, and any claim to the contrary is false,” said a source familiar with the matter. Another insider confirmed that the Commission had communicated its stance on the transaction directly to Shell.

One of the major reasons behind the delay in approval, it was gathered, stems from a barrage of petitions from civil society organisations (CSOs) regarding Shell’s environmental record in the Niger Delta. The Africa Network for Environment and Economic Justice (ANEEJ), along with 46 other CSOs, has urged the government to halt the divestment until the company addresses concerns over environmental degradation and livelihood loss in the region.

Several Niger Delta stakeholders have echoed these concerns, calling on the NUPRC to reconsider the deal in light of Shell’s environmental challenges in the area. These petitions, combined with ongoing litigation related to environmental damage, present significant obstacles to the completion of the transaction.

NUPRC’s Head of Public Affairs, Mrs Olaide Shonola, when contacted, confirmed that the Commission would issue an official statement on the matter in due course. In a previous update on ongoing divestments, the NUPRC had listed the NAOC-Oando and Equinor-Chappal deals as still under review but notably omitted any mention of the Shell-Renaissance transaction.

Shell had announced in January 2024 its intention to sell its onshore assets to Renaissance, a consortium of local exploration companies and a Swiss-based energy investment firm. The move is part of Shell’s strategy to shift focus to deepwater and integrated gas projects.