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Shell's planned sale of its onshore assets in Nigeria will not be affected by pending lawsuits, the company insists

June 22nd 2022, 12:05:21 pm

Shell Plc said the planned divestment of its 30% stake in the Shell Petroleum Development Company of Nigeria (SPDC) will not be affected by a recent Supreme Court ruling.

Shell's planned sale of its onshore assets in Nigeria will not be affected by pending lawsuits
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Recall that Business Insider Africa had reported in March that a Federal High Court in South-Eastern Nigeria ordered Shell to suspend the planned asset sale. The ruling followed an earlier appeal by the oil major against a $1.95 billion penalty that was imposed on it in 2020. The oil company had been found guilty of oil spillage and environmental degradation in a class action suit filed by 88 oil producing communities in Nigeria's Niger Delta.

Following the March 2022 ruling by a three-judge panel suspending the planned asset sale, Shell again appealed.

Interestingly, Nigeria's Supreme Court issued a ruling last week ordering all parties involved in the suits to “maintain the status quo” pending final rulings on the original suit against Shell by the communities and Shell's appeal.

Reuters quoted Mohammed Ndarani, the lawyer representing the communities to have explained that the Supreme Court ruling meant that "there should be no bids, no sales until the hearing of the applications which has been fixed for November 3, 2022.”

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Meanwhile, a spokesperson for the oil company, Bamidele Odugbesan, later disclosed that the Supreme Court ruling was not related to the suit stopping the company's planned divestment. In other words, the sale would go ahead.

"The Supreme Court ruling on 16 June was with respect to the contempt proceedings and not related to (the) onshore portfolio review," Odugbesan told Reuters.

Shell announced last year that it was divesting from the SPDC which is a joint venture consisting of 13 oilfields and co-owned by ENI, TotalEnergies and the Nigerian National Petroleum Corporation (NNPC). According to Shell, the venture no longer aligns with its long-term energy transition goals.

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Following the announcement of its intention to sell, the likes of Seplat Energy Plc, Sahara Group Ltd, Heirs Oil and Gas Ltd and ND Western Ltd indicated interests to acquire the assets. And then earlier this month, we reported that both Seplat and Sahara Group have dropped out from the bid.

Wood Mackenzie had in 2021 valued Shell's 30% stake in SPDC at $2.3 billion, based on an oil price rate of $50 per barrel.

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