By Adewale Sanyaolu
The oil and gas sector in Nigeria is coursing through a season of uncertainty as Shell Petroleum Development Company (SPDC) seals a $2.4 billion deal to transfer its onshore assets to Renaissance Africa Energy Holdings Limited.
Tongues are wagging over the sector’s future trajectory as fears mount over the capacity of the new firm to deal with inherent challenges.
Last Thursday, the Renaissance Group announced the full acquisition of SPDC. In a statement issued later that evening, the company’s spokesperson, Mr. Tony Okonedo, confirmed that SPDC will now be rebranded as Renaissance Africa Energy Company Limited.
The renaming follows the signing of a sale and purchase agreement with Shell in January 2024 and obtaining all regulatory approvals required for the transaction.
Renaissance Africa Energy Holdings is a consortium consisting of four successful Nigerian independent oil and gas companies which included; ND Western Limited, Aradel Holdings Plc, FIRST Exploration and Petroleum Development Company Limited, and the Waltersmith Group, each with considerable operations experience in the Niger Delta, and Petrolin, an international energy company with global trading experience and a pan African outlook.
However, some industry observers who spoke to Daily Sun in confidence, said the asset take over may trigger job losses, thus worsening the country’s unemployment crisis.
Moreover, concerns have been raised about the new company’s capacity to effectively manage the acquired assets.
An industry observer noted that addressing host community issues will likely be one of the foremost challenges the new owners must navigate in their early years of operation.
“You know the President is trying to push for the resumption of oil exploration activities in Ogoniland. He recently held a meeting with some leaders from that community.That meeting triggered a lot of backlash as some sections of the community disagreed on the composition of that meeting.
“We all know how Shell left Ogoniland in controversial circumstances. All promises by both SPDC and the federal government to clean up the community have not recorded much progress in over 20 years.
“That community is currently a shadow of itself as farming and fishing activities have been reduced to half. This will be a litmus test for the new owners. How they will succeed in that community and a host of others in what I don’t know?
“I just hope they have not used their resources to buy trouble,’’, he said.
However, another insider was upbeat that the asset acquisition would not lead to job losses as all aspects of that had already been taken care during discussions prior to the acquisition and had been signed as part of the deal.
The source explained that though SPDC has ceased to exist in Nigeria, the production arm of the Shell which is Shell Nigeria Exploration and Production Company (SNEPCO) operating its deep water asset and Shell Nigeria Gas(SNG) would continue to operate.
He explained further that under the old SPDC and SNEPCO model, some workers’ jobs cut across the two, saying that with this new ownership structure, some workers will have to go with the new owners while some will remain in SNEPCO.
On the other hand, workers are apprehensive of what would be their fate in weeks ahead in terms of who will be their employers.
“At the moment, no worker knows where he or she will fall. But the majority of the workforce prefer to be absorbed by SNEPCO which is still an IOC and operates in line with international standards and global best practices.
“No one knows what the working conditions would be under an indigenous company such as Renaissance, even though they have promised to surpass IOCs standard,”.
On the fate of the former Managing Director of SPDC, the source explained that it is only his designation that would change.
“Prior to now, he used to be known as Managing Director of SPDC and Country Chair, Shell Companies in Nigeria (SCiN) but with the asset sale, he would likely be named as Country Chair, SCiN. Besides, he ought to have retired about two years ago having attained 60 years but because of discussions around the sale, he had to wait and see to its completion. Now that it has been completed, I see him retiring”, he added.