Tinubu delivers five oil asset sale approvals, two FIDs

… As Shell-Renaissance deal secures ministerial consent

President Bola Tinubu has granted approvals for five oil asset sales and two final investment decisions (FIDs) in one year, eliciting positive feelings in Nigeria’s energy sector.

Tinubu, who won office last year, has brought some much-needed policy reforms to Nigeria’s petroleum industry in the form of presidential executive orders and policy directives.

The changes include investor tax credits, an investment allowance, simplification of contracting procedures, and easing of local content rules have led to major oil divestments, including Shell’s sale of $2.4 billion in assets to Renaissance Group.

On Wednesday, Renaissance Africa Energy Company Limited announced it had received approval from the Nigerian Ministry of Petroleum Resources for the acquisition of Shell Petroleum Development Company (SPDC).

Renaissance Energy’s acquisition marks a new chapter for the company, with ministerial consent serving as a crucial step in formalising the deal.

Industry insiders view this as a vote of confidence in the company’s technical expertise and financial capacity to develop the acquired asset effectively.

“This is a momentous achievement for Renaissance. We are committed to leveraging our expertise and resources to drive the growth of Nigeria’s energy industry and contribute to the nation’s economic development,” Renaissance said in a statement on Wednesday.

With the ministerial consent secured, Renaissance is expected to collaborate with all stakeholders to finalise the acquisition.

Shell had, in January 2024, announced it had reached an agreement to sell its assets to Renaissance, a consortium formed by five indigenous oil companies – ND Western, Aradel Energy, First Exploration & Production (E&P), Waltersmith, and Petrolin.

Other transactions include: Mobil Producing Nigeria Unlimited to Seplat Energy Offshore Limited divestment; Equinor Nigeria Energy Company Limited to Project Odinmin Investments Limited; TotalEnergies EP Nigeria Limited to Telema Energies Nigeria Limited; and the Nigerian Agip Oil Company Limited to Oando Petroleum and Natural Gas Company Limited.

These assets, previously held by international oil companies (IOCs), are expected to see renewed productivity under the stewardship of local and regional players, following the government’s commitment to fostering indigenous participation in the sector.

Read also: Five numbers from Nigeria’s 2025 budget presented by Tinubu

“Looking at 2024, the government has made some strides on energy that have the potential to improve the long-term macroeconomic outlook but also to make Nigeria a more attractive energy jurisdiction. The President’s energy team deserves credit for their work,” Clementine Wallop, director for sub-Saharan Africa at Horizon Engage, said.

She added, “The transformative moment for me was the announcement of the three presidential directives on energy in March. They showed that the government knew where the blockages were and that they were listening to and engaged with industry, marking a shift in tone.”

The three presidential directives include: Oil and Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order, 2024; Presidential Directive on Local Content Compliance Requirements, 2024, and Presidential Directive on Reduction of Petroleum Sector Contracting Costs and Timelines, 2024.

“I don’t want to sound too rose-tinted. Nigeria has a long way to go yet., Full, smooth implementation of the revised regulatory frameworks is a top priority. Likewise, communications need to improve, especially around fiscals and the impact of the planned tax changes on energy investors,” Wallop said.

Shell, on Monday, said its Nigerian subsidiary has announced a final investment decision (FID) on Bonga North, a deep-water project off the coast of Nigeria.

Shell said Bonga North has an estimated recoverable resource volume of more than 300 million barrels of oil equivalent (boe) and will reach peak production of 110,000 barrels of oil per day (boepd), with first oil expected by the end of the decade.

Earlier this year, the Ubeta oilfield (OML 58), the first blueprint project under this initiative, achieved an FID through a partnership between TotalEnergies and NNPC Limited.

Dormant since its discovery in 1965, the Ubeta project will produce 350 million standard cubic feet of gas per day, bolstering domestic supply and expanding Nigeria’s presence in the global energy market.

Experts say Tinubu’s first year in office has delivered tangible results for Nigeria’s oil and gas sector, with the approval of five asset sales and two FIDs standing out as milestones.

As companies like Renaissance Energy prepare to ramp up operations, the focus will remain on ensuring that these reforms translate into sustainable growth and tangible benefits for the Nigerian economy.