On January 16, 2023, the news went viral across social and traditional media that Shell is leaving Nigeria. On X (formerly Twitter), there are several accounts that the multinational oil company is closing down operations in Nigeria due to the harsh economic condition, oil bukering / theft, pipeline vandalism and other issues that are affecting their operations in Nigeria.
The CDD War Room therefore checks the veracity of the claim.
Claim: Is Shell leaving Nigeria?
Verification:
In 1936, The Royal Dutch/Shell Group founded Shell D’Arcy, the first Shell company in Nigeria. The company was granted exploration license in November 1938 and by April 1956, the name was changed to Shell-BP Petroleum Development Company of Nigeria Limited, poupularly called Shell SPDC Nigeria.
Shell PLC Nigeria has over the years moved from onshore oil exploration company, to have several other subsidiaries. They are:
I. THE SHELL PETROLEUM DEVELOPMENT COMPANY OF NIGERIA (SPDC)
This subsidiary of Shell Nigeria is the pioneer and leader of the petroleum industry in Nigeria. SPDC is the operator of the NNPC/SPDC/Total Energies/NAOC Joint Venture and supplies onshore and shallow water oil and gas to domestic and export market from its operations in the Niger Delta.
II. SHELL NIGERIA EXPLORATION AND PRODUCTION COMPANY (SNEPCO)
This subsidiary of Shell Nigeria pioneered deep-water oil and gas production from the Bonga field in the Gulf of Guinea where depths reach more than 1,000 metres. Asides oil production, SNEPCO has helped create the first generation of Nigerian oil and gas engineers with deep water experience and stimulated the growth of support industries.
III. SHELL NIGERIA GAS (SNG)
Shell Nigeria Gas Ltd is a fully owned Shell company incorporated in 1998 for the downstream distribution of gas to industries in Nigeria. SNG currently operates a growing world class gas transmission and distribution network of over 138km in Nigeria. It operates several distribution systems including Agbara-Ota in Ogun state, the Aba Cluster in Abia State, and the Port Harcourt Cluster in Rivers State.
IV. SHELL ENERGY NIGERIA
Shell Energy Nigeria is growing Shell‘s presence as a natural gas marketing and sales business in Nigeria to support the ‘Decade of Gas‘, an initiative by the Government of Nigeria to deploy gas as a fuel for economic development. This subsidiary is to support expanding the role of gas in power generation, local industry and to help provide new energy solutions across Nigeria
Asides these major subsidiaries, Shell Global has interest and investment across other sectors of the Nigerian economy. They include:
- DAYSTAR POWER
Shell Overseas International B.V. (SOI B.V.), a wholly owned subsidiary of Shell plc (Shell), acquired Daystar Power Group (Daystar). The acquisition is to provide integrated solar power solutions, and bring reliable energy to businesses in West Africa, helping customers reduce power costs and pollution.
- NIGERIA LNG LIMITED (NLNG)
The first NLNG project in Nigeria is a joint venture between Shell, NLNG, Total and ENI. Shell holds a 25.6% share, NNPC holds 49%, Total holds 15% while ENI holds 10.4%. NLNG accounts for approximately 7% of the world’s total liquefied and natural gas supply.
It is therefore important to know that of all these Shell subsidiaries and investments in Nigeria, it is only the Shell Petroleum Development Company (SPDC) that is closing operation in Nigeria; leaving other subsidiaries and investments in the country.
In addition, Shell has agreed to sell its Nigerian onshore oil and gas assets (SPDC) for a total of $2.4 billion to the Renaissance Oil. The Renaissance Oil is a consortium which includes ND Western, Aradel Energy, First E&P, Waltersmith and Petrolin.
According to the announcement, Shell will sell the Shell Petroleum Development Company of Nigeria Limited (SPDC) for a consideration of $1.3 billion,while the buyers will make an additional payment of up to $1.1 billion relating to prior receivables at completion.
Verdict: MISLEADING
The claim that Shell is leaving Nigeria is misleading. The oil and gas multinational is only selling the Shell Petroleum Development Company of Nigeria Limited (SPDC), one of its subsidiaries to a consortium led by Renaissance Oil. Its other subsidiaries such as SNEPCO, SNG and investments in Daystar and NLNG are still in operation in Nigeria.
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