December 19, 2024 [Oil Price]- Nigeria’s oil minister has finally approved Shell Plc’s (NYSE:SHEL) sale of $2.4 billion in assets to Renaissance Group, Renaissance has revealed. The greenlight comes just two months after Africa’s biggest crude producer declined to approve the sale of Shell’s onshore and shallow-water oil and gas in the Niger Delta region to a consortium of local companies. The rejection marked a setback for Shell, which has sought to exit the West African oil sector that’s currently plagued by significant oil spills and theft. The Nigerian assets hold a combined estimated volume of 6.73B barrels of oil and condensate and 56.27T cf of associated and non-associated gas.
The Nigerian government approved a similar sale of Exxon Mobil’s (NYSE:XOM) onshore oil and gas assets to a Nigerian energy supplier. Last year, Norwegian oil and gas giant Equinor ASA (NYSE:EQNR) finalized the sale of Equinor Nigeria Energy Company (ENEC) to local firm, Chappal Energy.
Interestingly, Shell’s approval comes days after the company announced it has taken a final investment decision on its long-delayed Bonga North deepwater project off the coast of Nigeria, the country’s first major deepwater development to move ahead in several years. According to Shell, Bonga North will be a subsea tie-back to the Bonga floating production storage and offloading facility, which it operates with a 55% interest. Shell’s partners in Bonga North are Exxon Mobil-owned Esso Exploration & Production with a 20% stake, as well as TotalEnergies (NYSE:TTE) and Nigerian Agip Explorationwith each owning 12.5%
With an estimated recoverable resource volume of more than 300M boe, Bonga North is expected to reach peak production of 110K bbl/day, with first oil expected by the end of the decade. The project involves drilling 16 wells – 8 production wells and 8 water-injection wells – installation of new subsea hardware tied back to the FPSO and modifications to the existing Bonga Main FPSO.
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