By Adedapo Adesanya
The federal government may approve the $1.3 billion asset sale deal between Shell and Renaissance, which was rejected in the coming weeks.
The Africa Report reported that deal may get approval following the announcement of Shell’s $5 billion investment in the Bonga North project.
According to the publication, the final investment decision (FID) served as a pavement for the oil major to get approval for the sale of its onshore and shallow water assets to Renaissance.
In October, the chief executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mr Gbenga Komolafe, revealed that while the government had processed five divestment applications, only four were approved – leaving out Shell’s asset sale to Renaissance, a consortium made up of four indigenous companies including Aradel Holdings, ND Western, First Exploration and Production (E&P) and WalterSmith as well as the international energy group, Petrolin.
These assets, initially at $2.4 billion and now at $1.3 billion, include an estimated 6.73 billion barrels of crude oil and condensate, along with 56.27 trillion cubic feet of gas.
The FG rejected the transaction because the consortium did not have the financial, experiential, and technical capacities to take over the assets.
On Monday, Shell Nigeria Exploration and Production Company Limited (SNEPCo), a subsidiary of Shell Plc announced the FID on Bonga North, a deep-water project off the coast of Nigeria.
President Bola Tinubu welcomed the move, lauding it as a good investment into the nation’s oil and gas sector.
Bonga North will be a subsea tie-back to the Shell-operated Bonga Floating Production Storage and Offloading (FPSO) facility which Shell operates with a 55 per cent interest.
The Bonga North project will involve drilling, completing, and starting up 16 wells (eight production and eight water injection wells), modifications to the existing Bonga Main FPSO and the installation of new subsea hardware tied back to the FPSO.
Bonga North currently has an estimated recoverable resource volume of more than 300 million barrels of oil equivalent (boe) and will reach a peak production of 110,000 barrels of oil a day, with the first oil anticipated by the end of the decade.
Bonga North will help ensure Shell’s leading Integrated Gas and Upstream business continues to drive cash generation into the next decade.