Shell shifting focus to deepwater and integrated gas in Nigeria as it wraps up onshore unit sale

According to Shell, the divestment is in line with its plan to simplify its presence in Nigeria through an exit of onshore oil production in the Niger Delta and focus on future disciplined investment in its deepwater and integrated gas positions. As stated by Renaissance, SPDC will be renamed Renaissance Africa Energy Company Limited.

“We are extremely proud to have completed this strategic acquisition. The Renaissance vision is to be ‘Africa’s leading oil and gas company, enabling energy security and industrialisation in a sustainable manner,'” said Tony Attah, Managing Director/CEO of Renaissance.

Now that the deal is finalized, Renaissance controls SPDC’s 30% stake in the SPDC JV, an unincorporated joint venture in which the state-owned Nigerian National Petroleum Corporation (NPC) holds 55%, Total Exploration and Production Nigeria 10%, and Agip Energy and Natural Resources (Nigeria) a 5% interest.

When the deal was announced in January 2024, the book value of the entity subject to the sale process was said to be around $2.8 billion. It was stated that SPDC JV holds 15 oil mining leases for petroleum operations onshore and three for petroleum operations in shallow water in Nigeria.

Zoë Yujnovich, then-Integrated Gas and Upstream Director at Shell, who recently decided to leave the company, said that it was time for SPDC to move to its next chapter under the ownership of an experienced Nigerian-led consortium.

In addition to international operations, Shell has been keeping busy at home. Earlier this month, the UK giant disclosed its plan to make a field development plan (FDP) and a final investment decision (FID) for the Selene gas project in 2027.

By Dragana Nikše, OFFSHORE ENERGY

Portugal looks to sideline Russia for increased Nigerian LNG supplies

Portugal has listed Nigeria alongside the United States as one of the countries it aims to get its supply of liquified natural gas (LNG) from.

This results from a shortage of LNG supplies from the Russian market, on which Portugal has traditionally depended on.

Maria da Graca Carvalho, Portugal's environment minister, disclosed this information on Tuesday.

According to statistics from power and gas networks operator REN, as seen in a report by Reuters, Portugal imported 49,141 gigawatt-hours (GWh) of natural gas in 2024, with around 96% of that amount being LNG.

Approximately 40 percent of those LNG deliveries came from the US, 4.4 percent from Russia, and 51% came from Nigeria.

This is sharp contrast to 2021 when Russia accounted for 15% of Portugal's LNG supplies.

However, sanctions placed on Russian products by the European Union, after the Kremlin declared war on Ukraine has seen Russian supplies dwindle.

"Portugal is now practically independent of Russian gas ... but we want to reduce this figure further by importing more gas from Nigeria and the United States," Graca Carvalho told a panel at the World Economic Forum in Davos, according to economic website ECO.

A recent report revealed that Nigeria’s LNG trade seems to be on an upward trajectory.

According to data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigeria produced 2.5 trillion cubic feet of gas last year.

This amounted to a revenue generation of approximately N8.6tn, throughout the year.

Nigeria generated 1.44TCF of associated gas, according to the data provided by the group. Likewise, in the period under review, 1.06TCF of non-associated gas was produced.

However, 192.89 billion standard cubic feet of gas were flared in 2024, whereas 2.31 trillion TCF of gas was used.

The 2.31TCF of gas used in 2024, as reported by the Punch, was roughly 2,370,061,914 MMBTU. When multiplied by $2.42, it comes to around $5.74 billion.

At an average exchange rate of N1,500 to the dollar, the number equates to around N8.6 trillion produced from gas output in 2024.

In contrast to 2023, when 2.3 tcf of the 2.49 tcf of gas produced was used and 183.52 bcf was flared, 92.2% of the gas generated in 2024 was used, while 7.69 percent was flared.

It took almost 2.46 million standard cubic feet for the gas to shrink.

The Nigerian government, last year, claimed that the country's gas output would increase from 7.5 billion cubic feet per day to 12 billion cubic feet per day.

In keeping with the Decade of Gas ambition, Ekperikpe Ekpo, Minister of State for Petroleum Resources (Gas), revealed that increasing gas production and transforming Nigeria into a gas economy will be the main priorities in his second year in office.

“In the Decade of Gas, we are looking at turning Nigeria into a gas economy by 2030, in which case, we are looking at growing from 7.5 billion cubic feet to about 12bcf. So, we are progressing in that direction to make sure we have gas sufficiency in the country,” he stated.

LNG-associated gas and non-associated gas

Liquefied natural gas (LNG) can come from two main sources: related gas and non-associated gas.

Associated gas is natural gas that occurs as a byproduct in petroleum reserves. It is "associated" because it coexists with crude oil in the same reservoir.

Typically extracted during the oil production process, the gas is separated from the crude oil and can be utilized as fuel for operations, re-injected into the reservoir to increase oil recovery, or converted into LNG for transportation and consumption.

On the flip side, non-associated gas refers to natural gas that occurs independently of crude oil.

It is found in natural gas reserves that do not contain considerable levels of crude oil.

By Chinedu Okafor, Business Insider Africa

Nigeria experts call for reforms in oil, gas

They made the at a one-day symposium themed “Nigeria Petroleum Industry: The Way Forward,” organised by Classmasters in collaboration with other partners.

The symposium focused on addressing the social, economic, and environmental challenges affecting the sector central to Nigeria’s economy for nearly seven decades.

Speaking to journalists at the sideline interview of the symposium, the Managing Director of Classmasters Limited, publishers of Development Agenda Magazine, Paddy Ezeala, called for collaboration and innovative solutions to tackle the oil and gas sector challenges.

He said, “We aim to ensure that all stakeholders understand the complexities of this industry and collaboratively create a path forward that meets global standards.

“This industry is vital to our economy and national identity. For decades, we have failed to harness its potential fully. There is an urgent need for reforms and a unified strategy.

“The Petroleum Industry Act (PIA) was a significant topic of discussion. Attendees advocated for amendments to address the diverse interests of stakeholders, including environmentalists, host communities, local operators, and international firms.

“No document is flawless, but this symposium aims to generate actionable recommendations to drive meaningful progress.”

Ezeala explained the event’s distinctiveness and strong support from key industry players, including NNPC Limited (NNPCL).

“Unlike previous gatherings, the outcomes of this symposium will not be ignored. As an environmentalist, I strongly advocate for mandatory environmental responsibility from all oil companies,” he added.

Participants expressed optimism about producing a comprehensive and actionable document to address critical issues such as energy transition, environmental sustainability, and socioeconomic challenges in the oil and gas industry.

For his part, Dr Oshita Oshita, the Executive Director of the Ubuntu Centre for Africa Peacebuilding and Development (UCAP), highlighted the growing security challenges in oil-producing areas.

“The Niger Delta faces evolving security threats that are deeply tied to the dynamics of oil production. Many underlying factors do not make it to the public domain but significantly impact the security landscape,” he remarked.

Oshita also underscored the link between Nigeria’s dependence on oil, often called the “Dutch disease,” and the neglect of oil-bearing communities. “The Niger Delta, despite being the source of the country’s oil wealth, remains one of the most underdeveloped areas. The people of this region see little to no benefit from the resources extracted from their land, fueling resentment and security crises. As long as these grievances persist, the challenges will remain.”

He argued that implementing the Petroleum Industry Act (PIA) presents a unique opportunity to address these issues.

“The PIA offers several opportunities that can be leveraged to transform oil-bearing communities and surrounding businesses. While the Act has its challenges, its potential to create a more equitable and sustainable industry cannot be overstated,” he said.

Oshita’s paper highlights the often-overlooked aspects of oil production, which significantly impact the security landscape.

He attributes the country’s struggles to the “Dutch disease,” which has led to an over-reliance on oil, neglecting other sectors of the economy.

A major concern is the lack of benefits for communities in oil-producing areas. This has led to ongoing security challenges, as people fight for their land and resources. Oshita proposes that Nigeria can overcome these challenges by leveraging opportunities presented by the Petroleum Industry Act (PIA).

Despite criticisms that Nigeria is not in control of its petroleum industry, Oshita believes that following the PIA’s guidelines can help the country regain control.

He stressed the need for stakeholders to focus on getting the benefits of the PIA, which can positively impact communities, oil-bearing communities, and surrounding businesses.

IPPMEDIA

Shell invests in Bonga North deep-water project in Nigeria

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

The project, which will help maintain oil and gas production at Bonga, will be connected to Shell's Floating Production Storage and Offloading (FPSO) facility, where the oil major holds a 55% stake.

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.

Reuters

Equinor exits Nigeria

Equinor has closed the planned sale of its assets in Nigeria and Azerbaijan for a total consideration of up to $2 billion, completing exits from the two countries after some 30 years, the Norwegian oil and gas firm said on Monday.

The divestments, first announced in 2023 and completed in recent weeks, will boost cash flow in the fourth quarter and were in line with Equinor's strategy to optimise its international portfolio, the group said in a statement.

"The exits enable investments to deepen further in countries where Equinor can add the most value and build a more focused and robust international portfolio," the company said without elaborating.
Equinor has previously said it plans to increase its international output by some 100,000 barrels of oil equivalent per day (boed) by 2030 by bringing on stream new fields in Brazil, Britain and the United States.

In Nigeria, Equinor sold its assets, including a 20.21% stake in the Agbami oil field operated by Chevron, to Chappal Energies for up to $1.2 billion, consisting of $710 million in cash and the remainder in contingent payments.

The company did not say how market prices and other factors could affect contingent payments.

In Azerbaijan it sold a 7.27% stake in the Azeri Chirag Gunashli (ACG) field, a 8.71% stake in the Baku-Tbilisi-Ceyhan (BTC) oil pipeline and a 50% stake in the Karabagh project to Azerbaijan's SOCAR and India's ONGC for a total of $745 million.

Equinor's net production in Azerbaijan and Nigeria averaged 24,600 and 17,700 barrels of oil equivalent per day (boed), respectively, during the first three quarters of 2024. 

Reuters

Nigerians Are Switching Cars to Compressed Natural Gas After Petrol Prices Surge

Long queues of cars are a common sight at petrol stations across Nigeria, but for some drivers turning to compressed natural gas, pumps are becoming a thing of the past.

A fivefold increase in petrol prices since the rollback of fuel subsidies last year has convinced them to make the switch to CNG, which is much cheaper and far kinder to the environment.

At the NIPCO Plc station on the outskirts of Abuja, the capital, business is also brisk for retrofitting cars to run on compressed gas. It’s built a dedicated workshop, where mechanics install the cylinders and inject systems to make the switch.

“We are booked until the end of January at least,” said Chris Uche, the technician in charge. “There are so many cars waiting to be converted.”

The CNG shift reflects a push by Africa’s top oil producer to ease its reliance on crude by promoting investment in the country’s largely unexploited 200 trillion cubic feet of proven gas reserves, most of which are burned off or re-injected into wells.


Incentives are being offered to gas companies, tariffs and taxes have been waived on CNG equipment, taxis and other commercial drivers can get discounts, and a 10 billion naira ($6 million) credit facility has been set up for private car owners to take the plunge.

The “mission is to enhance Nigeria’s energy security, lower transportation costs, and reduce carbon emissions,” said Toyin Subair, vice-chairman of a presidential committee on CNG, which has set a goal of converting 1 million vehicles by 2027.

The country is on track to meet its initial goal for 100,000 commercial vehicles by end-2024, he said, “bringing substantial cost savings to transporters, reducing public transport fares for Nigerians, and advancing Nigeria’s clean energy objectives.”

While that’s a modest goal given Nigeria’s 12 million vehicles, and low when compared to Egypt’s 500,000 CNG cars, it signifies the nation’s clean energy ambitions.

The conversion involves installing a high-pressure gas tank and fuel lines, a pressure regulator and injectors. When CNG is injected into the engine, it is ignited by the car’s spark plugs, similar to how gasoline is burned in a conventional engine.

Vehicles driven for rideshare platforms Uber and Bolt, distinctive in their elderly Toyota Corollas, Honda Civics and Peugeot 206s, have been keen customers. Their cars are now being retrofitted to run on CNG that retails for 230 naira per liter, one fifth of the price of petrol. Some drivers have seen profits surge more than 400% a month.

“The only disadvantage it has cost me is the space in the boot. Passengers with luggage have proved to be an issue,” said Bolt driver Clement Sunday, whose gold-colored 2002 Peugeot 206 runs on both petrol and CNG. Also, it “doesn’t drive as fast because gas burns slowly, but the oil is cleaner, the smokes are gone. This is a cleaner option,” he said.

The bulky yellow gas cylinder in his boot takes up a third of the space but can power the car for 150 kilometers (93 miles) on a single 3,500 naira fill.

Sunday spent 800,000 naira to modify the car, an amount that was a third less than the starting price thanks to the government subsidy, and says he has since recovered the investment in full.

While such drivers are just discovering the appeal of CNG, it’s been used in the trucking industry for years, including by billionaire Aliko Dangote. His tanker fleet has been retrofitted to make the 700 kilometer journey between Abuja and the commercial hub Lagos, where his oil refinery is located.

Nigeria hopes that a combination of Dangote’s refinery and the push into CNG will help end its costly need to import refined petroleum. That’s paid for in dollars, straining the country’s foreign exchange reserves and weakening the naira.

Despite the incentives, the promotion of CNG remains a work in progress.

Gas is produced in southern Nigeria by oil majors including Shell Plc and TotalEnergies SE, and is distributed to filling stations nationwide. But outside big cities, CNG use is low and even finding a station that sells it in Lagos or Abuja can he hard.

“We have to drive for two three hours to find a station, and as more cars are converted, the queues have lengthened,” said Sunday.

Also, other than the state-owned oil company and its partners like NIPCO, most gas distribution firms are staying away, describing the retail cost of CNG for cars as currently unprofitable because of price regulation.

Subsidy Substitution

“It is like replacing one subsidy with another, but we see the market settling at 50% - 60% of the price of petrol and diesel,” said Sumeet Singh, the chief executive officer of Powergas Africa Ltd, who prefers to sell CNG to factories and other industrial users where the price is unregulated.

The government says there are more than 90 conversion centers nationwide, with $450 million earmarked for investment in CNG infrastructure. Another 88 smaller stations are in development and mobile units to refuel up to 40 vehicles per hour are planned.

But the biggest hurdle to embracing the hybrid cars is probably safety concerns over driving with a gas cylinder on board. Unlike petrol, CNG reacts to temperature and risks exploding if not handled properly.

Its image wasn’t helped by a recent incident in the southern city of Benin when a car exploded while being filled up, injuring three people. The government, pushing back on what it claimed was misinformation on social media, said the accident was caused by an illegally-modified vehicle.

By Nduka Orjinmo and Ruth Olurounbi, Bloomberg 

Related story: Video - Nigerian drivers face hurdles in the transition to natural gas-powered vehicles

Nigeria signs $1.2 billion deal with Chinese state-owned company to revamp key gas plant

Nigeria has inked a $1.2 billion deal with a Chinese firm to revitalize a gas processing facility, a move that officials say could propel the African country to a leading position in aluminum production.

The deal between the Chinese state-owned CNCEC and the BFI Group, a major investor in the Aluminum Smelter Company of Nigeria, is expected to revive the 135 million standard cubic feet gas processing facility plant at the smelter. It was announced Tuesday by Nigeria's minister of state for gas via a post on the social platform X.

Minister of State for Gas Ekperikpe Ekpo expressed optimism about the “significant investment,” stating that it would position the smelter “back on the path to becoming a leading aluminum producer for both domestic and international markets.”

Nigeria and China’s economic relationship deepened in 2016, when the administration of former President Muhammadu Buhari visited Chinese President Xi Jinping and signed a number of agreements. Since then, Chinese companies have been contracted to build railways and provide infrastructure in Africa’s most populous country.

Despite being a major oil producer in Africa, Nigeria has some of the world’s highest poverty and hunger levels.

President Bola Tinubu, who took office last year, initiated reforms to reduce government spending and attract foreign investment. However, the country continues to face economic challenges, including a 28-year high inflation rate. Its currency, the naira, is at record lows against the dollar.

Many Nigerians have taken the streets in recent months to protest against the economic hardship they say is caused by the reforms. In August, at least 20 protesters were shot dead and hundreds of others were arrested.

By Dyepkazah Shibayan, AP

Nigeria signs $1.2 billion deal to revamp gas plant for aluminium smelter

Nigeria has signed a $1.2 billion contract with Chinese state-owned engineering firm CNCEC to revamp a gas processing plant crucial for the country's aluminium production, its Petroleum Ministry said.

The contract signed between CNCEC and BFI Group - the core investor in the Aluminum Smelter Company of Nigeria - is the first step towards reviving the dormant smelter, which has been plagued by years of inactivity due to legal disputes and financial issues.

The Petroleum Ministry said late on Monday that the deal would see CNCEC resuscitate the 135 million standard cubic feet per day gas processing plant at the dormant smelter, which can produce around 300,000 tons of aluminium annually.

Minister of State for Gas Epkerikpe Ekpo said the plant's restart would allow Nigeria to develop multiple stages of the aluminium production process and position it "as a major producer of aluminium in Africa and globally".

The plant is expected to produce around one million tons of aluminium annually and generate up to 540 megawatts of electricity, Ekpo said.

By Camillus Eboh, Reuters

Nigerian drivers face hurdles in the transition to natural gas-powered vehicles

Nigerian authorities plan to convert 1 million gasoline-engine vehicles to run on cheaper, cleaner compressed natural gas, or CNG, by the year 2027. Nigeria has some of the largest gas reserves in the world. But with only a few CNG filling stations available in the country, many who have converted the vehicles are facing a new challenge. Timothy Obiezu reports from Abuja.

VOA

Nigeria Looks To Jumpstart Natural Gas Sector with Tax Cuts

Nigeria is moving forward with a new policy framework aimed at jumpstarting its natural gas sector, hoping to draw in up to $10 billion in investments. The proposed measures include a series of tax incentives to attract both local and international investors to explore the country's deep-water gas resources.

The framework, which has already been approved by the Federal Executive Council, now awaits approval from the National Assembly. Once passed into law, this policy is expected to fast-track the development of Nigeria's natural gas infrastructure. Not only will this accelerate gas exploration and production, but it will also help the country transition away from relying heavily on fossil fuels for transportation. By doing so, Nigeria aims to boost its energy security and reduce its dependence on imported fuels.

The Nigerian government's strategic push toward natural gas is part of a broader effort to secure long-term energy independence and stabilize the economy. By providing tax breaks and other incentives, the government is positioning the gas sector as a key growth area that can create jobs, attract foreign investment, and reduce the nation's carbon footprint.

With the global shift toward cleaner energy, Nigeria's focus on natural gas development is timely. The success of this policy could significantly alter the nation's energy landscape and place it at the forefront of Africa's growing gas industry. Investors and industry professionals are now watching closely to see how quickly the new laws are implemented and how effectively they drive real change.

Earlier this week, Nigeria was set to approve the proposed $1.3-billion sale of ExxonMobil's shallow water assets to local firm Seplat. The transaction has been stuck at the regulatory approval level for months. While seeing its shallow water assets in Nigeria, it is looking to boost its deepwater investments in the country.

By Julianne Geiger, OilPrice

Nigeria Set to Approve Exxon Sale of Oil, Gas Assets to Seplat

Nigeria is set to approve Exxon Mobil Corp.’s sale of its oil and gas assets to domestic energy supplier Seplat Energy Plc, President Bola Tinubu said.

The “divestment will receive ministerial approval in a matter of days,” Tinubu said in a speech on Tuesday marking Independence Day in the West African nation. The move will “increase oil and gas production, positively impacting our economy,” he said.

Africa’s largest oil producer has consistently failed to meet its OPEC target because of years of underinvestment in its oil industry, a key driver of economic growth and government revenue. The country produced 1.48 million barrels of crude per day in August, compared with an OPEC quota of 1.5 million barrels, according to data compiled by Bloomberg.

Last week, Nigerian Vice President Kashim Shettima said that Exxon is considering investing as much as $10 billion in the country’s offshore oil industry in coming years. Seplat has previously said that acquiring Exxon’s assets would almost quadruple the company’s oil output to more than 130,000 barrels per day.

Approving the sale of assets to Seplat will end a more than two-year hiatus that stalled the conclusion of the $1.3 billion transaction. Nigeria’s state oil company in June withdrew a legal challenge blocking that had blocked the transaction.

“Our administration is committed to free enterprise, free entry, and free exit in investments, while maintaining the sanctity and efficacy of our regulatory processes,” Tinubu said.

The president said that economic reforms implemented by the government since he took office in May 2023 have attracted more than $30 billion in foreign direct investment to the country. While the policy overhaul has been welcome by foreign investors, it’s spawned a cost-of-living crisis in Africa’s most-populous nation that triggered deadly protests.

Other Highlights From Tinubu’s Speech:

. Since June 2023, the more disciplined approach adopted by the central bank to monetary policy management has ensured stability and predictability in the foreign exchange market.

. Over the past 16 months, Nigeria’s debt-service ratio has been reduced to 68% from 97%, and foreign reserves have grown to $37 billion from $33 billion.

. Progress has been made in eliminating banditry, kidnapping for ransom, and the scourge of all forms of violent extremism in northern Nigeria.

Once passed into law, the Economic Stabilisation Bills approved by the Federal Executive Council will improve Nigeria’s business environment, stimulate investment and reduce the tax burden.

By Ruth Olurounbi, Bloomberg

Exxon plans $10 billion oil investment in Nigeria

Exxon Mobil Corp has proposed a $10 billion investment in offshore oil operations in a new investment push in Nigeria, a presidential spokesperson said on Thursday, citing company executives.

The investment was announced during talks between Nigeria's Vice President Kashim Shettima and the CEO of Exxon's Nigeria operations Shane Harris on the sidelines of the U.N. General Assembly in New York on Wednesday, presidential spokesperson Stanley Nkwocha said in a statement.

Exxon plans to focus on developing its Owo project, a sizable deep-water project estimated to cost $10 billion.

The producer also plans to spend $2.5 billion annually to boost oil output by 50,000 barrels per day (bpd) over the next few years and maintain its Nigerian operations, despite agreeing to sell its onshore assets to Seplat Energy for $1.3 billion.

Exxon is working closely with the office of Nigeria's president "to secure favourable fiscal arrangements that will make this significant investment possible," Harris was quoted as saying.

An Exxon spokesperson didn't immediately respond to a request for comment.

Production of oil, which accounts for the bulk of Nigerian government revenue and foreign exchange, increased by 10.15% in the second quarter, averaging 1.41 million bpd, up from 1.22 million bpd a year earlier.

But Africa's largest oil producer is still grappling with challenges in its oil industry, including large-scale theft and sabotage, despite passing a law three years ago to ease regulatory uncertainties and attract investments.

"This potential investment by ExxonMobil aligns perfectly with President Bola Tinubu administration's vision for a more investment-friendly Nigeria," Shettima said. "We are committed to creating an enabling environment for such transformative projects." 

By Felix Onuah, Reuters

Video - Billionaire Dangote on Nigeria's Fuel Subsidy, Oil Prices, Arsenal

Nigerian billionaire Aliko Dangote said that ending Nigeria's gasoline subsidy is a “sensitive issue” in the nation that is used to cheap fuel. He also says it seems that the "time has passed" for him to buy the Arsenal soccer club. He speaks with Bloomberg's Francine Lacqua in New York.

Bloomberg

Related story: Nigeria’s Bid to End Fuel Subsidy Comes at Good Time for Dangote

 

Video - Nigeria, Equatorial Guinea sign gas pipeline agreement

Under the terms of the deal, the pipeline will transport gas from Nigeria to Equatorial Guinea, where it will be processed at the country's facilities before being sold to power companies and industrial users in the region. President Nguema Mbasogo said the gas pipeline deal is vital for Africa's development.

CGTN