The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has declined to approve Shell’s proposed sale of its $1.3 billion onshore assets to Renaissance, stating that the buyer is not qualified to manage the assets, according to report.
The report reveals that the Nigerian government expressed serious concerns over the buyer’s capability to manage Shell’s SPDC onshore assets, underscoring Nigeria’s stringent new guidelines.
According to the report, NUPRC declined to approve the deal on the grounds that the Renaissance consortium could not show it could manage the assets, adding that the regulator has communicated its decision to all the parties involved in the asset divestment deal.
Renaissance Africa Energy Company (RAEC) is a consortium, uniting five energy companies, including four independent Nigerian companies and an international company on a mission to harness Africa’s abundant energy resources as a catalyst to development and advancement.
The report also reveals that the companies that make up the group have been unable to operate at least 50% of all existing assets under their control.
“Shell and the government are in ongoing communication as part of the approval process for the sale of SPDC. SPDC will continue to provide the regulator with all information needed to complete the approval process,” a Shell spokesperson told Reuters.
Earlier this year, the Nigerian Upstream Petroleum Regulatory Commission released the terms and conditions required for asset divestment, as well as the role of the NUPRC and due diligence processes that exiting International Oil Companies (IOCs) must fulfill for such deals to be approved by the commission.
In a statement obtained by The Energy Republic, the companies also known as the ‘successor entity’ interested in acquiring the assets from IOCs must have the Technical Capacity, Financial Capability, Fulfilment of Legal Requirements, Decommissioning and Abandonment Plan, Host Community Trust Fund, Industrial Relations and Data Repatriation.