Shell, the energy giant, has committed to divesting its onshore oil and gas assets in Nigeria for $2.4 billion, indicating a strategic move away from onshore oil production.
The transaction involves the sale of Shell’s 49 percent stake in the SPDC Joint Venture, overseeing more than 30 onshore oil and gas fields, along with its investments in the Forcados and Bonny export terminals.
A consortium, led by the Nigerian independent energy firm Renaissance Oil and including ND Western, Aradel Energy, First E&P, Waltersmith, and Petrolin, marks a significant transformation in Nigeria’s oil industry landscape.
ND Western
ND Western Limited, is an independent Nigerian oil and gas exploration and production company made up of a consortium of four companies; Niger Delta Petroleum Resources Limited (NDPR), Petrolin Trading Limited (PETROLIN), FIRST Exploration & Petroleum Development OML 34 Limited and Walter-Smith Exploration and Production Limited.
It was incorporated on April 20, 2011 as a Special Purpose Vehicle to acquire the jointly held 45 percent participating interest of The Shell Petroleum Development Company of Nigeria, Total E&P Nigeria Limited and Nigerian Agip Oil Company Limited in Oil Mining Lease (OML) 34.
According to information made available to BusinessDay, contracts for the transfer of the assets were exchanged on June 17, 2011, at a historic signing ceremony of the Sale and Purchase Agreement with the NNPC/ Shell/ Total/Agip JV and the transaction completed on September 1, 2012.
“ND Western is now the holder of a 45 percent Participating Interest in OML 34, in an unincorporated JV with Nigerian Petroleum Development Company Limited (NPDC) that holds the remaining 55% interest previously held by its parent entity, the Nigerian National Petroleum Corporation. NPDC is the operator of the Asset,” the company said.
OML 34 lies in the onshore Western Niger Delta all-season land with 950 km2 area and it is strategic to the Federal Government of Nigeria’s gas-to-power and domestic gas supply.
According to the company, it’s primary objective for the acquisition of the asset was to maximise the commercial and economic value of the full spectrum of the resources in OML 34 to include growth in oil, gas, condensate and NGLs production.
On June 15, 2016, ND Western and NPDC signed off an Agreement which amends certain provisions of the Joint Operating Agreement to enable both party carry out Joint Operations of the asset through an Asset Management Team (AMT) in the short and medium term, and convert the existing unincorporated joint venture into an incorporated joint venture in the long term.
Aradel Holdings
Aradel Holdings Plc is an integrated energy Group, with interests in multiple oil and gas assets, and its business spanning the upstream, midstream and downstream value chain of the oil and gas industry.
The company was incorporated in March 25, 1992 originally as the Midas Drilling Fund and Nigeria’s first integrated oil and gas investment company.
It was changed to Niger Delta Exploration and Production Plc in November 1996 and assumed its current name in May 2023.
According to the Company, its Founding Chairman, Late Godwin Aret Adams, a former Group Managing Director of the old Nigerian National Petroleum Corporation (NNPC), and other professionals came together to set up the indigenous publicly owned oil company on the premise that ordinary Nigerians should have the opportunity to invest in and benefit from the oil and gas sector.
The legacy of the company spans from the year 2000 when it negotiated the first ever farm-out agreement with the NNPC/Chevron JV for a Marginal Oil Field in Nigeria to being the only non-NLNG partner to supply gas to NLNG in 2022.
The company changed its name to Aradel Holdings Plc last year.
First E&P
First E&P is a indigenous independent oil and gas company that was established in 2011 and commenced operations fully on July 1, 2012. According to the company, operations were started with about eleven employees.
In the same year, the company acquired a 10 percent shareholding interest in ND Western Limited (equivalent to 4.5 percent of the working interest in OML 34).
Last year, it became the first company to secure PIA approval (with partners and regulator) and inaugurated KEFFESO Host Communities Development Trust through NNPC/FIRST E&P OML83 & 85 joint venture.
Waltersmith
Waltersmith Petroman Oil Limited was incorporated in 1996 as a Joint Venture between Waltersmith & Associates Limited, a Nigerian company and Petroman Oil Limited of Calgary, Canada to operate as a Petroleum Exploration and Production company.
In 2001, Waltersmith Petroman Oil Limited became a wholly-Nigerian owned company with the divestment of Petroman Oil Limited.
In 2003, the company participated in the Nigerian Marginal Oil field licensing round for indigenous companies and was awarded the Ibigwe field located in Oil Mining Lease (OML) 16 by the Federal Government of Nigeria.
OML 16 was originally operated by the Shell Petroleum Development Company (SPDC) Limited on behalf of the Joint Venture of NNPC/SHELL/ELF/NAOC. The award was secured on a joint interest basis, with Waltersmith holding 70 percent and Morris Petroleum Limited, 30 percent.
In 2004, the Company executed a farm-out agreement with Shell Petroleum Development Company and its Joint Venture Partners including the Nigerian National Petroleum Corporation (NNPC) and effectively took over operatorship of the asset. The Company has since pursued a very aggressive growth strategy in line with its long-term goals and objectives.
Following initial entry, the Company achieved a modest “first oil” of 500 bpd in 2008 and has successfully operated the Ibigwe field with a wholly indigenous team ramping up oil production to a peak of 7,000 boepd and current average of 6,000 boepd.
“As at today, cumulative production from Ibigwe field is 14MMbbls, about twice the expected recoverable volumes at signing of the Farmout Agreement back then in 2004,” the company said.
Petrolin
Petrolin Group was established by Samuel Dossou-Aworet as Petrolin UK in 1992. The company started as a crude oil trading, and refinery processing company aiming to commercialise refined petroleum products.
In 2005, the company acquired a participating interest in the nigerian oil company, Niger Delta Exploration and Production (NDEP).
In 2012, Petrolin became one of the principal shareholders of ND Western Limited, a Nigerian company which, in 2012, acquired 45 percent participating interest held by Shell, Total and Eni in Block OML 34.
Two years later, it acquired a stake in Seplat Development Company Plc, which contributed to the success of Seplat’s IPO at the London Stock Exchange.
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