Energy giant Shell has announced plans to sell its Nigerian onshore oil and gas assets, signalling a shift in its strategy for the African nation.
This move, however, does not mark a complete exit from Nigeria, as Shell still maintains significant investments in the country through its offshore assets, gas business, and liquefied natural gas (LNG) operations.
Here is a breakdown of Shell’s assets in Nigeria:
SNEPCo
While Shell divested its onshore assets, it retained control of its lucrative deepwater operations in the Niger Delta.
These offshore fields, responsible for the bulk of Shell’s Nigerian oil production, are not part of the recent sale and continue to pump out crude for global markets.
For instance, Shell Nigeria Exploration and Production Company Limited (SNEPCo) operates the Bonga field, Nigeria’s first deepwater oil discovery. The Bonga field produces more than 200,000 barrels of oil and 150 million standard cubic feet of gas.
SNEPCo began producing oil from the first well in the Bonga North West deep-water development off the coast of Nigeria on August 5, 2014.
According to SNEPCo, the field is located around 120km off the coast of Nigeria in the Gulf of Guinea at a depth of more than 1,000 metres (3,300 feet). All six wells (four oil-producing and two water injection wells) are now completed and on stream, contributing more than 40,000 barrels of oil equivalent at peak annual production.
Last Month, Shell pledged $5 billion to a deepwater project at Bonga North.
“In the deep water, we have an imminent investment opportunity in Bonga North. This is $5 billion. I am keen to make that investment as soon as possible. We want to continue and build a pipeline of new investments in Nigeria,” Zoe Yujnovich, the global integrated gas and upstream director of Shell Group said in a visit to President Bola Tinubu on December 7 2023.
SNG
Shell also maintains a robust presence in Nigeria’s gas market, operating a network of gas facilities and a liquefied natural gas (LNG) export facility on Bonny Island.
For instance, Shell Nigeria Gas Limited (SNG), founded in 1998, is a wholly-owned subsidiary of Shell, with the primary objective of distributing gas to the Nigerian industry downstream.
Data sourced from Shell showed SNG runs a 138-kilometre gas transmission and distribution network in Nigeria. It runs distribution networks in Agbara-Ota in Ogun State, the Aba Cluster in Abia State, and the Port Harcourt Cluster in Rivers State.
NLNG
Shell, through Shell Gas B.V., holds a 25.6 percent interest position in Nigeria LNG Limited (NLNG), which produces and exports Liquefied natural gas (LNG) to international markets.
“Besides its interest in Nigeria LNG Limited, Shell Gas holds the largest equity share of LNG capacity among international oil and gas companies, with a leading position in LNG shipping, marketing and trading of natural gas and power in Europe, North America and Asia Pacific,” Facts and Figures from NLNG report said.
All-On
Beyond its traditional oil and gas activities, Shell is increasingly venturing into the renewable energy sector in Nigeria.
The company has partnered with the Nigerian government on several solar power projects through All-On who also facilitate the creation and delivery of clean energy to underserved and unserved off-grid energy communities in Nigeria.
All On invests in off-grid energy solutions spanning solar, wind, hydro, biomass and gas technologies deployed by both foreign and local alternative energy companies that complement available grid power across Nigeria and help bridge the nation’s significant energy gap.
According to the company, more than 75,000 energy connections have been provided by the investee companies since the program’s start in 2017.
Daystar Power Group
In 2022, Shell acquired Daystar Power, a West African solar power company, a major acquisition in its renewable energy business. It has around 250 projects across West Africa.
Daystar Power has about 40 megawatts (MW) of solar installation as of the end of 2022, with plans to rapidly grow and expand into other markets.
The company was founded in 2017 by Jasper Graf von Hardenberg and Christian Wessels to help reduce the energy deficit in businesses with solar power.
