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Shell $1.3bn assets sale gets regulatory agency nod

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7 months ago

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Shell $1.3bn assets sale gets regulatory agency nod

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has accepted Shell International Plc’s bid to sell its onshore assets to Renaissance in a transaction worth $1.3 billion.

Senior government sources told BusinessDay that the transaction that involves Shell’s 75-year-old onshore assets to Renaissance – a consortium of four exploration and production companies in Nigeria and an international energy group – has got the green light from the regulatory commission as required by the Petroleum Industry Act (PIA).

This deal, if successful, is expected to increase Nigeria’s oil production, boost government petrol dollar earnings, support the naira and accelerate the government’s plans for gas development.

The deal, however, still requires the final approval of President Bola Tinubu, who currently holds the portfolio of minister of petroleum resources.

“NUPRC has approved the sale and made the recommendation to the minister of petroleum for approval. This is on the minister’s table. All ‘next steps’ await the minister’s consent,” a senior government source said.

Another senior government source added, “As you know, the minister, who doubles as president, has been out of the country. As the minister has not yet given his approval, all next steps – statutory payments – await his consent.”

The British energy giant pioneered Nigeria’s oil and gas business beginning in the 1930s. It has struggled for years with hundreds of onshore oil spills as a result of theft, sabotage and operational issues that led to costly repairs and high-profile lawsuits.

Shell in January announced that it had reached an agreement to sell its onshore assets in the Niger Delta region to Renaissance and focus on deepwater and integrated gas investments.

The buyer, the Renaissance consortium, comprises ND Western, Aradel Energy, First E&P, Waltersmith, all local oil exploration and production companies, and Petrolin, a Swiss-based trading and investment company.

Sources said Shell executives have promised to assist in speedily developing Bonga assets, support an increase in oil production and accelerate the government’s plans for gas development if the Shell/Renaissance deal sees the light of the day.

“They want to put $7 billion down to develop Bonga and in three years help local operators develop an additional 300,000 barrels per day (bpd) to 500,000 bpd. They also want to stake partnership to ensure that the gas part of the deal is quickly done to benefit Nigeria,” one of the senior government sources said.

Efforts to reach Olaide Shonola, head of public affairs at NUPRC, via calls or messages proved abortive as at the time of writing these reports.

Implications for Bonga

While the deal promises to inject new energy into Nigeria’s oil and gas sector, experts are closely examining its potential impact on Bonga’s production and development plans.

Bonga, Nigeria’s first deepwater oil field, can currently produce 225,000 bpd of crude oil and 150 million standard cubic feet (scf) per day of gas which feeds the Nigeria Liquefied Natural Gas (NLNG) plant at Bonny.

Developing Bonga Southwest had been expected to add around 1 billion barrels to Nigeria’s oil reserves. Shell had previously said it would develop the Bonga Southwest project across three phases with a total potential yield of 3.2 billion barrels.

Output from the field was one of the projects Nigeria was banking on to raise production to around 3 million bpd by 2023, the Nigerian National Petroleum Company (NNPC) officials said.

Nigeria, which produces high-quality light sweet crude oil, has seen its production slump to multi-decade lows, due to operational, technical and sabotage issues.

Nigeria can pump around 2.2 million bpd of crude and condensate but output languished near 1.3 million bpd in July 2024, according to NUPRC’s estimates.

Developing the Bonga Southwest will cost $10 billion, according to estimates by the NNPC, the concessionaire of the field.

The bulk of Bonga Southwest’s resources are located in OML 118, but it also extends to OMLs 132 and 140, operated by US major Chevron, where it is called Aparo. Other partners in the project are France’s TotalEnergies and Italy’s Eni.

Assets at stake for divestment

Shell said it has structured the deal to maintain Shell Petroleum Development Company of Nigeria Limited (SPDC) operational capabilities to support the SPDC Joint Venture (SPDC JV).

Data sourced from Shell Nigeria’s Briefing Notes 2023 showed the operating assets of SPDC JV include: 250 producing oil wells (189 West assets and 61 East assets); 37 producing gas wells (4 West assets and 33 East assets); four gas plants and two onshore oil export terminals.

Other partners in the SPDC JV include: the NNPC (55 percent), Total Exploration and Production Nigeria (10 percent) and Nigeria Agip Oil Company (5 percent).

As part of the transition, SPDC’s employees will remain with the company under the new ownership.

Shell’s 25.6 percent interest in Nigeria’s Liquefied Natural Gas (NLNG) plant is not included in this transaction.

Shell’s presence in Nigeria will still be significant post-sale, with three businesses that will also remain outside the scope of the deal.

These include: Shell Nigeria Exploration and Production Company, which operates in the deepwater Gulf of Guinea; Shell Nigeria Gas, which supplies gas to local industries and commercial customers; and Daystar Power Group, which is engaged in offering solar power solutions across West Africa.

Win for indigenous companies

The Renaissance consortium comprises some of Nigeria’s most respected upstream companies with demonstrated track records of redeveloping mature assets in the Niger Delta.

Individually, each of Renaissance’s shareholders has also demonstrated an ability to operate in Nigeria and maximise domestic value creation. Aradel Holdings has grown an integrated oil, gas and refining business around Ogbele that has continued to expand over the years.

Waltersmith follows a similar pattern as operator of the producing Ibigwe marginal field and the Ibigwe modular refinery. First E&P successfully commissioned the Anyala-Madu shallow water hub in 2020 and is working with Dangote on achieving first oil at the Kalaekule Field soon.

Nigeria is currently faced with a gas supply shortage that must be addressed to meet the objectives of the ‘Decade of Gas,’ which seeks to grow gas penetration and develop a gas-based economy that is more sustainable and spurs industrialisation.

As Nigeria seeks to grow gas production, processing, and distribution, Renaissance will become a pillar of the country’s gas monetisation strategy and a critical partner to the public and private sector players seeking to expand the country’s gas value-chain.

In that regard, the appointment of Tony Attah, former Shell executive and managing director/CEO of Nigeria LNG for more than five years, as Renaissance’s first MD/CEO is not insignificant.

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Elon Musk sells X to AI startup for $33 billion

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2 hours ago

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March 29, 2025

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Elon Musk sells X to AI startup for $33 billion

Billionaire entrepreneur Elon Musk has announced the merger of his artificial intelligence startup, xAI, with his social media platform, X, in an all-stock transaction valued at $45 billion.

This move brings xAI’s valuation to $80 billion, while X is valued at $33 billion.

Both xAI and X are privately held entities under Musk’s control.

The two companies share notable investors, including Andreessen Horowitz, Sequoia Capital, Fidelity Management, Vy Capital, and Saudi Arabia’s Kingdom Holding Co.

Musk, in a post on X, stated that the merger would combine their data, computing power, distribution, and talent to create more advanced AI-driven experiences while staying committed to their core mission of truth and knowledge advancement.

“@xAI has acquired @X in an all-stock transaction. The combination values xAI at $80 billion and X at $33 billion ($45B less $12B debt).  

Since its founding two years ago, xAI has rapidly become one of the leading AI labs in the world, building models and data centers at unprecedented speed and scale. 

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X is the digital town square where more than 600M active users go to find the real-time source of ground truth and, in the last two years, has been transformed into one of the most efficient companies in the world, positioning it to deliver scalable future growth. 

xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent. This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach. The combined company will deliver smarter, more meaningful experiences to billions of people while staying true to our core mission of seeking truth and advancing knowledge. This will allow us to build a platform that doesn’t just reflect the world but actively accelerates human progress. 

I would like to recognize the hardcore dedication of everyone at xAI and X that has brought us to this point. This is just the beginning,” he stated.

xAI’s growing footprint in AI 

Founded less than two years ago, xAI aims to “understand the true nature of the universe.” The company has been developing large language models and AI tools, positioning itself as a direct competitor to OpenAI, a company Musk co-founded in 2015 before exiting due to strategic differences.

In June 2024, xAI announced plans to build a supercomputer in Memphis, Tennessee, to train its AI chatbot, Grok. By September, Musk revealed that part of the Memphis-based supercomputer, called Colossus, was already online.

xAI’s rapid expansion has drawn scrutiny from environmental and public health advocates, who cite a lack of community input in its Memphis project. The Colossus supercomputer is powered by natural gas-burning turbines, and xAI plans to expand operations with a nearby graywater facility.

 

Elon Musk sells X to AI startup for $33 billion

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MTN, Airtel to share network infrastructure in Nigeria

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1 day ago

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March 28, 2025

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MTN, Airtel to share network infrastructure in Nigeria

Airtel Africa has partnered with MTN Group to expand digital inclusion by sharing network infrastructure in Uganda and Nigeria.

In a statement in Lagos on Wednesday, Airtel said the sharing agreements aim to improve network cost efficiencies, expand coverage, and provide enhanced mobile services to millions of customers.

A sharing agreement is a formal arrangement between two or more parties to share resources, assets, or services.

According to the telecommunications company, the partnership will benefit customers in remote and rural areas who do not yet fully enjoy the benefits of a modern connected life.

Airtel assured that both parties will ensure the agreement complied with local regulatory and statutory requirements.

Sunil Taldar, chief executive officer (CEO) of Airtel Africa, said telecommunications companies are driving digital financial inclusion by building common infrastructure within the regulatory framework.

Taldar noted that the collaborative approach not only advances digital transformation and financial inclusion but also reduces the duplication of expensive infrastructure.

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As a result, Taldar said operational efficiencies are boosted, ultimately benefiting customers.

He further said telecoms continue to compete fiercely in the market, differentiating themselves through their brand, services, and offerings.

“The initiative is part of a growing global trend toward network sharing. By collaborating, telecoms operators can explore innovative and pro-competitive solutions to improve service quality while managing costs more effectively,” Taldar said.

“The sharing of infrastructure has the potential to enable the delivery of world-class, reliable mobile services to more and more customers across Africa.”

Taldar added that following the conclusion of agreements in Uganda and Nigeria, MTN and Airtel Africa are also exploring various opportunities in other markets, including Congo-Brazzaville, Rwanda, and Zambia.

Ralph Mupita, MTN Group CEO, said there is a need to invest in coverage and capacity to ensure high-quality connectivity to meet customers’ increasing demands.

“As MTN, we are driven by the vision of delivering digital solutions that drive Africa’s progress,” Mupita said.

“We continue to see strong structural demand for digital and financial services across our markets.

“To meet this demand, we continue to invest in coverage and capacity to ensure high-quality connectivity for our customers.”

Mupita added that there are opportunities within regulatory frameworks for sharing resources to drive higher efficiencies and improve returns.

MTN, Airtel to share network infrastructure in Nigeria

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NNPCL in historic initial public offer, ready for capital market

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1 day ago

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March 28, 2025

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NNPCL in historic initial public offer, ready for capital market

The Nigerian National Petroleum Company Limited (NNPCL) has announced that it is in the final stages of preparation for its much-anticipated listing on the capital market, in line with the provisions of the Petroleum Industry Act (PIA) 2021.

The company’s Chief Corporate Communications Officer, Olufemi Soneye, disclosed this in a statement on Thursday in Abuja.

According to the statement, the Chief Finance and Investor Relations Officer, Olugbenga Oluwaniyi, revealed the development during a consultative meeting with partners at the NNPC headquarters.

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He stated that NNPCL is currently engaging with potential investors through an exercise called the “NNPC Ltd. IPO Beauty Parade,” which aligns with capital market regulations ahead of its Initial Public Offer (IPO).

“According to the CFIO, the aim of the IPO Beauty Parade is to access potential partners and determine in what ways they could be of support to the company,” the statement explained.

The statement further highlighted that NNPCL is seeking partnerships in three key areas: Investor Relations, IPO Readiness Advisors, and Investment Banking Partners. Companies with the most competitive offers will be selected for each category.

An IPO is a public offering in which a company’s shares are sold to institutional investors. Under the PIA, NNPCL is required to list its shares on the capital market in compliance with the Companies and Allied Matters Act (CAMA) 1990.

NNPCL in historic initial public offer, ready for capital market

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