" NUPRC sets guidelines to approve Shell’s sale of onshore operations" 30 April 2024

The Nigeria Upstream Petroleum Regulatory Commission (NUPRC) has established a divestment framework to oversee the evaluation of applications for ministerial consent regarding the Shell Petroleum Development Company of Nigeria Ltd. (SPDC) divestment process. This framework, composed of seven key pillars, will also be applied to similar divestment activities in Nigeria. NUPRC’s Chief Executive, Mr. Gbenga Komolafe, announced this during the NUPRC-Shell Petroleum Development Company of Nigeria Ltd. divestment workshop held on Monday in Abuja.[...]

Guidelines to be met

Komolafe outlined the seven cardinal pillars of the framework, which include technical capacity, financial capability, legal considerations, decommissioning and abandonment (D&A), host community trust/environmental remediation fund, industrial relations and labour issues, and data repatriation. He explained that under technical capacity, the successor entity must demonstrate a verifiable ability to vigorously operate the asset, while the NUPRC will evaluate the financial viability of the prospective successor to carry out a defined program and meet the required obligations for the assets.

Regarding the legal framework, he noted that the acquiring entity must be considered a ‘fit and proper’ person legally. Additionally, he mentioned that there must be clear proof of the resolution of legacy debts and legal encumbrances. [...]

Earlier this year, Shell announced the sale of its onshore operations to Rennaissance Energy- a consortium of about five companies for about $1.3 billion– a figure which will eventually reach $2.4 billion with additional payments.

• The deal has come under intense pressure from host communities and civil society groups who seek Shell pays for oil spills and damages across the Niger Delta region.
• This month, Amnesty International joined a long line of CSOs to add their voice to the call for the federal government to halt the sale on the grounds of not having put in place appropriate safeguards in terms of human right and environmental cleanup.