According to a report on the environmental impact of multinational companies’ activities, Shell PLC is anticipated to address its old infrastructure in Nigeria before finalizing its exit from the country.
As part of the move, Shell is expected to either dismantle the ageing infrastructure or contribute financially to their removal from the Niger Delta, as reported by Reuters.
Shell sold its Nigerian onshore subsidiary, The Shell Petroleum Development Company of Nigeria Limited (SPDC), to a consortium of five companies called Renaissance in January 2024.
The total consideration payable to Shell for the transaction is $1.3 billion, with additional cash payments of up to $1.1 billion, primarily related to prior receivables and cash balances.
During the announcement of the deal, Shell stated that the Renaissance consortium would assume responsibility for addressing oil spills in the Niger Delta.
According to Gbenga Komolafe, the head of the Nigerian Upstream Petroleum Regulatory Commission, major oil companies must adhere to decommissioning rules before obtaining consent to exit.
The report also highlighted concerns raised by Audrey Gaughran, SOMO’s executive director, stating, “The big issue is that Shell is leaving onshore Niger Delta and leaving behind potentially a massive bill for cleanup.”
However, despite these concerns, the government has signalled that it does not intend to block Shell’s sale deal.