The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has officially confirmed the blockage of the $1.3 billion sale of Shell’s onshore assets to the Renaissance Group. Regulatory issues were cited as the primary reason for the halt, according to NUPRC’s CEO, Gbenga Komolafe, who disclosed the development during an interview with Reuters in Abuja.
Regulatory Setback for Shell
The assets involved in the transaction are significant, holding approximately 6.73 billion barrels of oil and condensate, as well as 56.27 trillion cubic feet of associated and non-associated gas. While confirming the regulatory roadblock, Komolafe did not provide specific details, only stating that the deal “could not scale (the) regulatory test.”
Environmental and Legal Challenges
In addition to regulatory issues, the sale has faced opposition from environmental activists and affected communities. These groups have raised concerns about Shell’s environmental track record, linking the company to numerous lawsuits seeking compensation and restoration for land and rivers damaged by historic oil spills. The legal battle further complicates Shell’s efforts to finalize the deal with Renaissance.
NUPRC’s Conditions for Approval
The NUPRC, while blocking the sale, indicated that it would expedite the approval process under certain conditions. Chief Executive Gbenga Komolafe explained that Shell would need to take full responsibility for past oil spills and agree to fund cleanup efforts in the Niger Delta for the deal to proceed more swiftly. Without this commitment, the approval process could face significant delays, as the NUPRC would need to assess and assign all liabilities related to the environmental damage.
Legal Hurdles from Host Communities
Further complicating the matter, residents of the host communities have filed a N500 billion lawsuit against Shell Petroleum Development Company. The lawsuit accuses Shell of violating a “Mareva” injunction, which seeks to halt the sale of the onshore assets until pending environmental claims are resolved. This legal challenge adds another layer of complexity to the already embattled transaction.
Source: Nairametrics