"This agreement marks an important milestone for Shell in Nigeria, aligning with our previously announced intent to exit onshore oil production in the Niger Delta, simplifying our portfolio and focusing future disciplined investment in Nigeria on our Deepwater and Integrated Gas positions," said Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director.
The deal value could be worth up to $2.4 billion: Shell will sell the SPDC for $1.3 billion, while the buyers will make an additional payment of up to $1.1 billion for past claims upon closing.
The buyer, the Renaissance consortium, consists of ND Western, Aradel Energy, First E&P, Waltersmith, all domestic oil exploration and production companies, and Petrolin, a Swiss-based trading and investment company.
The sale, however, still requires the approval of the Nigerian government.
Despite its claims of building "a high-quality business" in Nigeria, Shell has brought serious environmental problems to the country.
In November 2023, the UK High Court granted over 13,000 Nigerians from the Ogale and Bille communities permission to sue Shell for the severe consequences of oil pollution in the Niger Delta. The plaintiffs are seeking justice, compensation and a clean-up from the oil giant.
The High Court ruling overturned an earlier Court of Appeal decision which had dismissed the claims on the grounds that they were time-barred. In her ruling, Judge Justice May concluded that there was a valid argument that the pollution has seriously violated the plaintiffs' right to a clean environment as guaranteed by the Nigerian Constitution and the African Charter on Human and Peoples' Rights. In addition, she stated that these rights are not time-barred, meaning that the plaintiffs can pursue their claims regardless of when the spills occurred.
Shell has denied any legal liability for the spills, claiming that they were the result of oil theft and sabotage by organized criminal groups, despite the environmentalists' claims that the company never cleaned up the affected sites, but has often set them ablaze to hide the evidence. Shell argues that the plaintiffs do not have the legal right to sue the company in a London court, suggesting that the case should be handled in Nigeria instead. Moreover, Shell expressed its disappointment with the High Court ruling and announced its intention to appeal.
The case against Shell is one of the biggest environmental legal cases in British history. It raises crucial questions regarding the responsibility and accountability of multinational oil and gas corporations for the social and environmental consequences of their activities, particularly in developing countries.