The Federal High Court in Nigeria has given Shell Petroleum Development Company of Nigeria Limited (SPDC) and Global Gas and Refining Limited until January 22, 2025, to update the court on their progress toward an out-of-court settlement. This deadline comes as the two parties negotiate over claims that Shell did not fulfill its obligations to supply wet gas per their Gas Processing Agreement (GPA) from March 2002.
Justice Inyang Ekwo scheduled this new date after both sides indicated that discussions have continued since the previous adjournment in September 2024. Global Gas’s legal team is seeking court protection to prevent the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) from authorizing Shell’s $1.3 billion asset divestment to Renaissance Consortium.
Dispute Background
Global Gas, represented by Executive Chairman Ken Yellowe, alleges that Shell failed to honor the GPA terms regarding wet gas supply. Yellowe, through Senior Advocate of Nigeria Patrick Ikweato, requested a temporary order to prevent Shell’s assets from being sold, citing risks to their 2002 agreement. Global Gas argues that if Shell divests its assets, the company’s interests could be jeopardized.
In a sworn statement, Global Gas also emphasizes that the matter is already under review at Nigeria’s Supreme Court, and that the trial court should intervene to maintain the status quo until the NUPRC can be properly addressed in this case. Ezeokeke, a representative for Global Gas, asserts that while the case is pending, the NUPRC has publicly advertised its evaluation of Shell’s onshore assets for Renaissance’s potential acquisition.
Shell’s Position
In response, SPDC’s legal counsel, Kingsley Osuh, refutes the claims, stating that Shell has not sold any onshore assets but rather structured a share sale, where SPDC’s shares, rather than physical assets, are proposed to be transferred to Renaissance. SPDC also insists it remains financially able to compensate Global Gas should the court uphold the latter’s claims.
At the recent hearing, Ikweato confirmed that Global Gas is waiting for Shell to conclude its side of the negotiations. Shell’s counsel acknowledged the efforts toward a “peaceful resolution,” while NUPRC’s lawyer, Chikaoso Ojukwu, requested to be included in any settlement correspondence.
Justice Ekwo concluded by scheduling the January 2025 court date, advising that Shell and Global Gas keep NUPRC informed as they work toward an agreement.
Context on Shell’s Divestment
Shell’s decision to divest from Nigerian onshore assets reflects a broader strategy shift due to Nigeria’s operational challenges, including oil theft and environmental impacts from spills. In 2023, Shell resumed talks to sell its 30% interest in the SPDC joint venture after a temporary halt in 2022.
NUPRC later introduced a divestment oversight process to assess applications for ministerial consent on Shell’s potential sale, which has attracted scrutiny from advocacy groups like Amnesty International, who urge the government to reconsider the divestment. Despite recent rejections, Renaissance Consortium has publicly announced its transaction agreement with Shell for SPDC shares, with the NUPRC clarifying that due diligence is still in progress.
The evolving situation reflects the Nigerian government’s interest in fostering local management of onshore oil assets and its oversight in ensuring qualified ownership, especially amid shifts in the global energy landscape.
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