Shell to divest its entire Nigeria JV portfolio
As Shell is preparing for a new era with a much smaller, advantaged portfolio, this move is symbolic of what the energy transition means for IOCs in Africa.
Shell has been active in Nigeria since the 1930s. It’s no exaggeration to say that Nigeria helped transform the company into the supermajor IOC we know today. Now, 63 years after producing its first barrel in Nigeria, Shell plans to divest all of its operated joint venture (JV) licenses held by the Shell Petroleum Development Company (SPDC). This includes a 30% interest in 19 oil mining leases (OMLs).
This is a radical step which would have seemed unlikely only 12 months ago but is highly symbolic of what the energy transition means for IOCs in Africa.
In our short video below, our experts assess Shell's JV divestment plans in Nigeria using our Lens Upstream solution.
The Niger Delta: incompatible with Shell's net zero ambition
Emissions from Shell's assets in the onshore and shallow water Niger Delta are among the highest in its global portfolio. This is because of ageing infrastructure, under-investment, vandalism, continued flaring and the harsh operating conditions.
Until now, Shell has sold oil blocks but kept gas blocks supplying NLNG. This has changed, perhaps surprisingly, given that Shell seeks 55% gas in its global portfolio by 2030. Shell's gas assets have the lowest emissions intensity within the JV, although still comparatively high compared with its global average.
The integration of these assets with oil infrastructure coupled with the ever-present security risks may have further persuaded Shell that a clean break from the onshore delta is, on balance, preferable. Rather than sell single OMLs, Shell is seeking buyers for asset packages in the eastern, western and shallow water delta.
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