Shell is selling its onshore subsidiary in Nigeria for $2.4bn. The new owners are Renaissance, a consortium of businessmen that includes Nigerians, a non-Nigerian, and a Special Purpose Vehicle. We dig into the five companies.

Oil giant Shell announced that it had reached an agreement to sell its Nigerian onshore subsidiary, Shell Petroleum Development Company (SPDC), on Tuesday, to Renaissance, a consortium comprising four exploration and production companies and one international energy group.

The Anglo-Dutch company has been pumping Nigerian oil onshore for almost a century, beginning operations during the colonial era. The withdrawal follows a pattern of Western oil companies selling onshore oil production units, and focussing on more lucrative and secure deep offshore sites.

The transaction, worth $2.4bn, has been designed to preserve the technical expertise, management systems, and processes that Shell implements on behalf of all the companies in the SPDC Joint Venture (JV).

SPDC JV is an unincorporated joint venture comprising SPDC Ltd (30%), Nigerian National Petroleum Corporation-NNPC (55%), Total Exploration and Production Ltd (10%), and Nigeria Agip Company Ltd (5%).

SPDC’s staff will continue to be employed by the company as it transitions to new ownership, Shell said in a statement. The sale still requires approval from the Nigerian government.

Below are the five companies which make up Renaissance, the new owners of Shell’s onshore subsidiary.

1. ND Western

ND Western Limited is an independent Nigerian oil and gas exploration and production company comprising a consortium of four companies: Niger Delta Petroleum Resources Limited, Petrolin Trading Limited, First Exploration & Petroleum Development Limited, and Walter-Smith Exploration and Production Limited.

It was incorporated in 2011 as a Special Purpose Vehicle to acquire the jointly-held 45% participating interest of SPDC Nigeria, Total E & P Nigeria Limited, and Nigerian Agip Oil Company Limited in OML 34. Contracts for the transfer of the assets were exchanged in 2011, and the transaction completed in 2012. ND Western now holds 45% of OML 34 while the Nigerian Petroleum Development Company Limited (NPDC), the operator of the asset, holds the remaining 55% interest.

OML 34 — with a production capacity of 600 million cubic feet of gas per day and 20,000 barrels of oil per day — lies in the onshore Western Niger Delta of Nigeria. It has three producing fields in the south-east of the block: Ughelli East, Ughelli West, and Utorogu, which were developed in the 1960s.

2. Aradel Energy

Founded by the late Godwin Aret Adams, former group managing director of the NNPC, Aradel Holdings Plc has been an integrated energy player for over a decade.

The company is among the early developers of marginal oil and gas field operations in Nigeria, after it started crude oil production in 2005 from Ogbele marginal field. It is also a partner supplier of gas to the Bonny NLNG plant.

It was incorporated in 1992 originally as the Midas Drilling Fund and Nigeria’s first integrated oil and gas investment company. In November 1996, it was changed to Niger Delta Exploration and Production Plc, before assuming its current name in May 2023. In the first nine months of 2023, the company’s revenue tripled, rising by 239% to N123bn ($135m) from N36bn in the same period in 2022. Its profit after tax surged by 170% during the same period.

3. FIRST E&P

FIRST Exploration & Petroleum Development Company is a Nigerian oil and gas company founded in 2011 by Ademola Adeyemi-Bero, a former Shell employee. It holds 10% of ND Western’s 45% participating interest in OML 34; 40% working interest in OML 83 and OML 85; and 15% of West African Exploration and Production Company Limited’s 45% working interest in OML 71 and OML 72.

The company purchased the OML 83 and 85 stakes from Chevron and that of OML 71 and 72 from the combined equity of Shell, Total, and ENI. The West African exploration and production venture is a partnership with Africa’s richest man Aliko Dangote, with the latter serving as the funding partner.

In 2017, FIRST E&P announced a $700m strategic joint venture project with Schlumberger and NNPC to jointly develop OML 83 and OML 85, two blocks located in the shallow waters offshore Bayelsa State. The project began three years later and was expected to produce 60,000 barrels of oil per day at peak production.

The first phase of the project is for the development of 142 million barrels of oil and 98 billion standard cubic feet of gas from the fields.

Last year, FIRST E&P announced a plan to develop an open-access offshore gas gathering and processing hub — of up to one billion standard cubic feet per day — around the OML 83 and 85 assets.

4. Waltersmith

Waltersmith Petroman Oil Limited was incorporated in 1996 as a joint venture between Waltersmith and Associates Limited, a Nigerian company, and Petroman Oil Limited of Calgary, Canada, to operate as a petroleum exploration and production company.

In 2001, Waltersmith Petroman Oil Limited became a wholly Nigerian-owned company with the divestment of Petroman Oil Limited.

Two years later, the company participated in the first Nigerian marginal oil field licensing round organised by the federal government and was awarded the Ibigwe Field located in OML 16, Imo State, Nigeria’s south-east.

The Waltersmith refinery, also located in Imo State, is owned by the company (70%) and the Nigerian Content Development and Monitoring Board (30%). It is the biggest commissioned modular refinery in Nigeria. Phase one of the refinery, with an initial capacity of 5,000 barrels of crude oil per day (bpd), began operations in November 2020. It has a total processing capacity of 50,000 bpd.

Co-founded by former bankers Abdulrazaq Isa and Danjuma Saleh, Waltersmith Petroman Oil Limited has produced more than five million barrels of crude oil since it began operations.

5. Petrolin Group

Established as Petrolin UK Limited in London in 1992, the company acquired a participating interest in the Niger Delta Exploration and Production Company (NDEP) in 2005. The company operates two marginal oil fields located in onshore blocks OML 53 and 54. The two blocks were ceded to NDEP by Chevron and NNPC.

Founded by Samuel Dossou-Aworet, the Beninese-Ganonese billionaire, the company is headquartered in Geneva, Switzerland, and operates in exploration and production in Africa and the Middle East.

In 2011, the company became one of the principal shareholders (40%) of ND Western Limited, a Nigerian company which acquired a 45% participating interest held by Shell, Total, and Eni in OML 34 block.

Dossou-Aworet, through Petrolin Group, owns a 13.87% stake in Seplat Energy, Nigeria’s largest listed energy group.

Petrolin Group holds participating interests in exploration blocks in four other African countries — Democratic Republic of Congo, Malawi, Zambia, and Tanzania.