Claim: Users on X recently posted that Shell would be totally exiting all its operations in Nigeria.
Verdict: Our research revealed this to be inaccurate and misleading, however.
In May 2022, Timipre Sylva, Nigeria’s Minister of State for Petroleum Resources, announced that the Integrated Oil Companies of Nigeria were leaving Nigeria because the environment was becoming perilous for their operations.
Recently, the oil sector has been beset by an onslaught of troubles, which has eroded investors’ confidence in the market. In effect, many international companies have had to close down business operations in the country, further raising concerns about the economic landscape.
A number of accounts on social media hinted at the oil giant’s exit from the country. One of such posts Prime Progress came across read:
“Shell just announced they are leaving Nigeria. What are the white people seeing that we are not seeing yet?”
At the time of analysis, the post had gleaned 472,000 views and 3000 likes.
Shell just announced they leaving Nigeria. What is this white people seeing that we are not seeing yet?
— Dr Yusuf Datti Baba-Ahmed (STAN) #ObiDatti2023 (@Naija_Activist) January 16, 2024
Another user wrote that the oil giant was leaving the country because of rising competition from Nigerian-owned Dangote Refinery, which began oil production at the start of the year.
Prime Progress delved into the veracity of each of these claims.
A chain of exits
The last few months have seen the exit of several international oil firms from Nigeria. Exxon Mobil, for instance, announced in 2022 that it was selling its shallow-water assets to a Nigerian company because it found operations in Nigeria challenging.
In the same vein, Eni, an Italian oil firm, sold one of its Nigerian subsidiaries in September 2023, although it still operates two businesses in the country.
Norway’s energy giant Equinor sold its subsidiary to Nigerian firm Chappal Energies last November, exiting the Nigerian market.
In December, consumer goods firm Procter & Gamble announced plans to discontinue manufacturing in Africa’s most populous country, citing discrepancies in the foreign exchange rate.. British pharmaceutical giant GlaxoSmithKline also exited Nigeria In the last quarter of 2023.
Sale of onshore subsidiary
Shell announced on January 16, 2024, that it was selling one of its Nigerian onshore subsidiaries, The Shell Petroleum Development Company, or SPDC of Nigeria Limited, to a consortium of local and international companies.
According to its press release, completion of the sale depended on the approval of the Nigerian government and “other conditions.”
Although SPDC is Shell’s largest subsidiary in Nigeria, its sale doesn’t indicate its parent company’s exit from Nigeria.
“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,” Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director, said in his statement on January 16.
Shell’s deepwater position in Nigeria refers to its subsidiary with offshore operations, while its integrated gas holdings comprise onshore and offshore components. Three subsidiaries that run these operations for the company were not part of the sale, Shell said.
They include: Shell Nigeria Exploration and Production Company Limited or SNEPCo, Shell Nigeria Gas Limited or SNG, and Daystar Power Group. SNEPCo operates the Bonga oil field in the Gulf of Guinea, where it explores for oil and gas, while SNG distributes gas for commercial use. Daystar, acquired in 2022, provides solar power.
While Shell has announced the sale of its largest onshore subsidiary in Nigeria, the claim of a total exit is misleading. The company remains active through various other subsidiaries, both onshore and offshore.