The Nigerian Upstream Petroleum Regulatory Fee (NUPRC) has stated it plans to evaluate environmental liabilities earlier than it may well enable Shell PLC to switch onshore operations to a neighborhood participant.
Shell early this yr stated it had signed an settlement with Renaissance Africa Power Co. Ltd. promoting Shell Petroleum Growth Firm of Nigeria Ltd. (SPDC) to the native consortium, to be able to concentrate on deepwater property and downstream gasoline actions within the West African nation.
Final month, a number of rights teams wrote to the NUPRC calling for the company to dam the divestment till Shell has taken monetary duty for “legacy air pollution” from the infrastructure being transferred and till the technical functionality of the possible new proprietor has been established.
The NUPRC has now stated in an announcement it had organized a “due diligence workshop” on the divestment.
Whereas the NUPRC known as the sale to Renaissance a “noteworthy step ahead in Nigeria’s petroleum trade”, it stated the workshop had been held “to determine a successor with the monetary assets and technical experience to handle the property responsibly”.
The assertion added, “Key issues embrace the evaluation of environmental liabilities, adherence to regulatory necessities, and trade greatest practices”.
The NUPRC stated it has put in place a seven-pillar framework for assessing divestments. “These pillars embody technical capability, monetary viability, authorized compliance, decommissioning obligations, host group engagement, labor relations, and knowledge repatriation”, it stated.
Within the letter to the NUPRC dated April 8, the rights teams together with Amnesty Worldwide alleged “widespread technical issues” with Shell’s pipeline infrastructure within the Niger Delta leading to repeated spills.
“[T]he sale of SPDC shouldn’t be permitted except native communities have been absolutely consulted; the environmental air pollution brought on to this point by SPDC has been absolutely assessed; funds have been positioned by SPDC in escrow ample to ensure that clean-up prices will likely be lined; and the technical capacities of the useful entity have been verified and established”, the group informed the regulator.
An announcement on oil spills on Shell’s Nigerian web site says the corporate responds to incidents in accordance with rules and globally accepted good practices. The assertion highlights that the corporate publishes knowledge on oil spills.
The assertion says oil theft and sabotage are accountable for many oil spills within the Niger Delta. Of a number of incidents reported on the web site for the primary quarter of 2024, just one incident has been attributed to an “operational” trigger, the remaining “sabotage”.
Asserting the divestment settlement with Renaissance January 16, Shell stated, “The transaction has been designed to protect the total vary of SPDC’s working capabilities following the change of possession”.
“This consists of the technical experience, administration programs and processes that SPDC implements on behalf of all the businesses within the SPDC Joint Enterprise (SPDC JV)”, Shell added, referring to its 30 p.c held and operated JV with Nigerian Nationwide Petroleum Co. Ltd. (55 p.c), Whole Exploration and Manufacturing Nigeria Ltd. (10 p.c) and Nigeria Agip Oil Co. Ltd. (5 p.c).
Shell’s onshore operations in Nigeria, that are the topic of the divestment, include 15 oil mining leases operated beneath the JV, based on Shell.
Shell stated the transaction was valued at $2.4 billion, together with SPDC’s “prior receivables and money balances”.
Apart from Shell, multinational majors Eni SPA, Equinor ASA and Exxon Mobil Corp. have secured agreements to divest Nigerian property.
Norway’s majority state-owned Equinor introduced November 29, 2023, it had inked a deal to promote altogether its Nigerian enterprise to Nigeria-domiciled Chappal Energies Mauritius Ltd.
On September 4, 2023, the Italian government-controlled Eni introduced an settlement divesting considered one of its models in Nigeria, the onshore-focused Nigerian Agip Oil, to Oando PLC, saying the transfer is a part of efforts to refocus on extra worthwhile property.
On February 25, 2022, Texas-based ExxonMobil introduced an settlement to promote its fairness stake in Mobil Producing Nigeria Limitless to native participant Seplat Power PLC.
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