…staffers say more interested in continuity terms
A fracture appears to be developing within the ranks of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) concerning the sale and impending handing-over of Shell Nigeria’s onshore assets to the Renaissance Consortium.
While the labour union, PENGASSAN, is questioning Shell’s move to sell its onshore assets and the standing of the would-be buyers, staffers say they are more concerned with the terms and conditions of their continued engagement by the new owners and desire more detailed communication relating to that.
Shell has maintained that “SPDC’s staff will continue to be employed by the company as it transitions to new ownership”.
This comes as Shell Plc, a British multinational oil and gas company headquartered in London, is set to conclude nearly a century of operations in Nigerian onshore oil and gas operations, after agreeing to sell its subsidiary in the country to the Renaissance Consortium, a group of five mostly local companies, for up to $2.4 billion.
Some restiveness, however, developed among an estimated 2,425 direct staff of Shell Nigeria and many more contract personnel of the company about their fate going forward, as the company is set to to hand over its onshore operations to the Renaissance Consortium, the new owners-in-waiting.
The sale, which Renaissance confirmed, requires the approval of the Nigerian government.
PENGASSAN, however, expressed misgivings with the transaction, claiming that the Renaissance Consortium which is in line to buy up Shell’s assets is unknown to it.
Soon after, PENGASSAN issued a statement, saying the group is an assemblage of unknown entities with no proven track record of managing such diverse assets.
“We reject without equivocation all the terms affecting employees that were communicated in the presentation to our members,” PENGASSAN said in the statement.
Shell employee insider sources, however, say that the generality of the staffers are not against the sale of Shell’s onshore assets.
Our sources, who chose not to be identified, said the sale of Shell’s onshore operations did not come as a surprise to them, as the discussion had been in the public space for a considerable time.
They affirmed that Shell had over the years established itself as a responsible and respectable employer of labour in Nigeria.
They added that quite a number of the prominent figures in the Renaissance Consortium, including Messrs Tony Attah, Bayo Ojulari and Demola Adeyemi-Bero, were familiar to them, having worked for upwards of a decade in senior management positions at Shell.
These persons, they said were well conversant with the corporate values, including terms, conditions and welfare of staff at Shell and should be able to replicate them in the new dispensation.
Tony Attah, a past MD/CEO of Nigeria LNG (NLNG), is a past Managing Director and Chairman of the Board of Shell Nigeria Exploration and Production Company (SNEPCo).
Bayo Ojulari is also a former Managing Director of SNEPCo, while Demola Adeyemi-Bero was a senior production engineer at Shell.
They further said they were more concerned with the terms and conditions of their engagement going forward and desired more explicit communication on the subject.
Indicating the Federal Government is at ease with the transaction, Heineken Lokpobiri, Nigeria’s minister of state for petroleum, said at the World Economic Forum in Davos that the government would not impede legitimate business transactions, reaffirming its commitment to “fostering a business-friendly environment” in the sector.
The buyer, the Renaissance Consortium, comprises ND Western, Aradel Energy, First E&P, Waltersmith, all local oil exploration and production companies, and Petrolin, a Swiss-based trading and Investment Company.
The company has an estimated 2,500 direct staff in Nigeria of which 97 percent or 2,425 are Nigerians.
“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,” Shell head of upstream, Zoë Yujnovich, said of the transaction.
The British energy giant pioneered Nigeria’s oil and gas business beginning in the 1930s. It has struggled for years with hundreds of onshore oil spills purportedly as a result of theft, sabotage and operational issues that led to costly repairs and high-profile lawsuits.
Since 2021, Shell has sought to sell its Nigerian oil and gas business, but will remain active in Nigeria’s more lucrative and less problematic offshore sector.
Shell’s exit is part of a broader retreat by western energy companies from Nigeria as they focus on newer, more profitable operations. Exxon Mobil (XOM.N), Italy’s Eni and Norway’s Equinor (EQNR.OL) have struck deals to sell assets in the country in recent years.
The British major will sell The Shell Petroleum Development Company of Nigeria Limited (SPDC) for a consideration of $1.3 billion, it said in a statement, while the buyers will make an additional payment of up to $1.1 billion relating to prior receivables at completion.
Renaissance will take over the responsibility for dealing with spills, theft and sabotage, said Shell, which has faced in recent years multiple lawsuits for compensation over damage caused as a result of spills in the Niger Delta.
Shell’s SPDC Limited operates and has a 30% stake in the SPDC joint venture that holds 18 onshore and shallow water mining leases. Shell’s resources in SPDC reached around 458 million barrels of oil equivalent by the end of 2022.
Other partners in the joint venture are the state’s Nigerian National Petroleum Corporation (NNPC), which holds 55%, TotalEnergies (TTEF.PA), with 10% and Italy’s Eni (ENI.MI) with 5%.
Apart from its operations and stakes in several fields deep offshore, Shell still has a liquefied natural gas plant and other assets in Nigeria.
SPDC, which remains the operator, was formed in 1979, incorporating assets of the older Shell-BP consortium, with its current partners entering at later stages.
Shell paid $986 million in royalties and taxes to the Federal Government of Nigeria in 2021 and awarded $800 million worth of contracts to Nigerian registered companies in the same year.
Shell was ordered to pay $15.9 million to communities in Nigeria that were affected by multiple oil pipeline leaks in the Niger Delta at the end of 2022, the oil company said in a joint statement with the Dutch division of Friends of the Earth.
The compensation was the result of a Dutch court case brought by Friends of the Earth, in which Shell’s Nigerian subsidiary SPDC was found to be responsible for the oil spills and was ordered to pay for damages to farmers.
“The settlement is on a no admission of liability basis and settles all claims and ends all pending litigation related to the spills,” Shell said.
An independent expert had confirmed that SPDC had installed a leak detection system on the KCTL Pipeline in compliance with the appeal court’s orders, the company added.
The case was brought in 2008 by four farmers and environmental group Friends of the Earth, seeking reparations for lost income from contaminated land and waterways in the region, the heart of Nigeria’s oil industry.
After the appeals court’s final ruling, Shell said it continued to believe the spills were caused by sabotage.
