Claim: The British energy giant Shell PLC is leaving Nigeria due to economic hardship.
Verdict: Misleading! The company explained it is selling its Nigerian onshore oil and gas unit for up to $2.4 billion but will retain the offshore arm of the business. Thus, the company is only partially leaving the country.
President Bola Tinubu’s economic policies have been a subject of intense discussion since he assumed office on May 29, 2023. His administration came under fire following the exits of some multinationals from the country.
Not long ago, British energy giant Shell PLC announced its plan to sell its Nigerian onshore subsidiary –the Shell Petroleum Development Company of Nigeria Limited (SPDC)– to Renaissance for $2.4 billion.
It, however, noted that the completion of the transaction was subject to approvals by the federal government of Nigeria and other conditions.
In reaction, the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, explained that the government would approve the sale of Shell’s onshore assets if the oil major provided the necessary documents.
However, news on social media appeared contrary to the information provided in the press release issued by Shell.
Recall that Unilever Nigeria announced its exit from the homecare and skin-cleansing markets after recording a decline in revenue and an increase in losses.
However, the company still produces food, beauty, wellbeing, and personal care products.
Before that, GlaxoSmithKline (GSK) Consumer Nigeria Plc explained that its operations in Nigeria would no longer involve commercialising its prescription drugs and vaccines. The company’s activities in the country now entail only distributing its pharmaceutical products through a third party.
Also, Procter & Gamble joined the trend in December 2023 when it announced plans to terminate its on-ground operations in Nigeria.
Other notable companies had also shut down operations of some sections of their companies in the country, as seen here.
Some Nigerians had attributed this to the new administration’s policies, which had barely spent nine months in power.
Therefore, following the announcement by Shell to sell its Nigerian onshore subsidiary (SPDC), some social media users translated this to mean the entire operations of the British oil giant would be shut down in the country.
Due to its sensitivity and virality on social media, DUBAWA fact-checked the claim.
In the press release issued by the company, Shell explained it was selling off only its onshore subsidiary while it would focus investment on Deepwater and Integrated Gas positions.
Also, the company had sought to exit onshore oil production in the Niger Delta as far back as 2021. According to reports, the company had sold a handful of its onshore oil blocks over the years upon the need to cut risk due to community unrest and continued sabotage attacks on its oil installations.
Confirming this in a recent statement, Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director, said:
“This agreement marks an important milestone for Shell in Nigeria, aligning with our previously announced intent to exit onshore oil production in the Niger Delta, simplifying our portfolio and focusing future disciplined investment in Nigeria on our Deepwater and Integrated Gas positions.”
The company further explained that while selling SPDC, it retains the technical expertise, management systems, and processes that SPDC implements on behalf of all the companies in the SPDC Joint Venture, with an assurance that the company still employs SPDC staff.
The company added that it has three other main businesses in Nigeria that are not affected by the transaction: Shell Nigeria Exploration and Production Company Limited (SNEPCo), Shell Nigeria Gas Limited (SNG), and Daystar Power Group.
To further ensure its continued transaction in Nigeria, Shell said it holds a 25.6% interest in Nigeria LNG, producing and exporting LNG to global markets.
The claim that Shell PLC is completely leaving Nigeria is misleading. The company only rejigged its operations in the country.