Divestments, Renaissance, and the Future of Nigerian Energy 

Nigeria, with more than 200 trillion cubic feet (TCF)  of proven natural gas reserves, ranks ninth among the world’s gas-rich nations.

Despite this, the country’s abundant natural gas remains largely untapped, undermining significant potential for broad based national development and improved standard of living for its citizens, millions of whom are unfortunately instead today categorized as among the world’s multi dimensionally poor.

Many Nigerians do not have access to electricity and rely heavily on biomass for energy, which poses significant health risks. For instance recent statistics indicate that more than 100,000 Nigerian lives are lost annually to issues including smoke inhalation while cooking.

In alignment with the United Nations’ Sustainable Development Goal 7 (SDG7) — which aims to ensure that populations have access to affordable, reliable, sustainable, and modern energy by 2030, Nigeria has made some progress but still has a long road ahead. Historically, the country has faced underinvestment and declining oil output as foreign investors have turned their attention to more attractive global markets.

This and other existing factors has necessitated the rise of indigenous players who have local environment and and in some instances global industry experience, understand local nuances and are more committed to aiding Nigeria in the reduction of energy poverty and unlocking its economic potential.

Renaissance Africa Energy Company, a consortium of five energy companies, including four leading Nigerian independents and one international trading company was founded with the vision of becoming Africa’s leading energy company. Having declared its commitment to a business strategy which prioritizes energy security, industrialisation, and sustainable development across the continent, the consortium combines expertise from all its eminent members. Those companies currently jointly produce an estimated 100,000 barrels of oil per day from the Niger Delta. Between them there are also two operational modular refineries and associated infrastructure with some of which have attained integrated operations.

A significant recent development was when the President and Minister of Petroleum Resources granted ministerial consent to the transaction between Shell and Renaissance Africa Energy Limited for the 100% acquisition of the Shell Petroleum Development Company (SPDC). This approval marks a major step forward in the process which began with a competitive process for the acquisition which involved interest and participation of scores of interested parties.

The process was professionally managed by reputable technical and professional advisory. It also involved significant technical and commercial rigour and professionalism and led to the emergence of the Renaissance consortium and the eventual formal signature of a sale and purchase agreement between parties in January 2024.

Away from the unfortunate seeming controversy which seemed to trail recent the Nigerian divestments almost without exception, it is important to view the exercise within the perspectives of a broader strategy to indigenize and diversify energy investments in Nigeria, aligning with the Tinubu administration’s cardinal ambition to strengthen the critical oil and gas industry by reforming and strengthening regulatory frameworks and guidelines, creating opportunities for smooth entry and growth in a way which will attract investments and technology, create employment and spur rapid overall development.

As international companies shift their priorities away from onshore  portfolios in response to climate change and strategic considerations, indigenous energy companies are ready to lead the future of Nigeria’s energy sector. Another important development to note is that Nigerian independents have in the face of challenging circumstances continued to demonstrate execution capacity, technical and commercial efficiency and enhanced understanding of their communities, ensuring greater cohesion and improved overall relations.

The Renaissance Consortium Members 

The Renaissance Africa Energy Consortium is composed of five key players, each contributing unique strengths and capabilities:

ND Western Limited  

ND Western was formed through the vision of Aradel Holdings Plc, Petrolin Trading Limited, FIRST Exploration & Petroleum Development Limited, and Walter-Smith Exploration and Production Limited. Incorporated in April 2011 as a Special Purpose Vehicle (SPV), the company acquired a 45% stake in Oil Mining Lease (OML) 34, held jointly by Shell, Total E&P Nigeria, and Nigerian Agip Oil Company.

OML 34, located in the Western Niger Delta, includes producing fields such as Utorogu, Ughelli East, and Ughelli West, and serves as a significant supplier of gas for electricity generation, with reserves totaling approximately 3 trillion cubic feet (Tcf). ND Western has proven it commitment to capacity building through an Intensive Training Programme based at its learning hub in Warri and the Utorogu Industrial Park.

OML 34, located in the Western Niger Delta, includes producing fields such as Utorogu, Ughelli East, and Ughelli West, and serves as a significant supplier of gas for electricity generation, with reserves totaling approximately 3 trillion cubic feet (Tcf). ND Western has proven it commitment to capacity building through an Intensive Training Programme based at its learning hub in Warri and the Utorogu Industrial Park.

Aradel Holdings Plc 

Established in 1992 as Midas Drilling Fund, Aradel Holdings has evolved into a fully integrated energy company with investments across the energy value chain, including gas, power, refining, and renewables.

Listed on the NGX Exchange in 2024, Aradel increased its production capacity of 18,000 barrels of oil per day (bbls/d) and operates a gas processing plant with a capacity of 100 million standard cubic feet per day (scf/d). At the 2024 NGX Made of Africa Awards, Aradel Holdings Plc won the Listing of the Year (Equity) Award, which recognised the highest value of a new listing in the period under review.

In line with its vision to deliver sustainable energy solutions that support economic growth, Aradel pioneered Modular Refinery development and owns and operates an 11,000bbls/d refinery, producing Automotive Gas Oil (AGO), Household Kerosene (HHK), Marine Diesel Oil (MDO), High-pour Fuel Oil (HFO) and Naphtha.

Aradel has also pioneered the Host Community Development Trust, a concept enshrined in Nigeria’s Petroleum Industry Act (PIA), emphasising its commitment to community development.

Waltersmith Petroman Oil Limited 

Waltersmith Petroman Oil Limited was established in 1996 as a joint venture between Waltersmith & Associates Limited (Nigeria) and Petroman Oil Limited (Canada). It became wholly Nigerian-owned in 2001 after the divestment of Petroman Oil.

The company has extensive experience in the Nigerian energy sector, having participated in the 2003 Nigerian Marginal Oil Field Licensing Round and acquiring the Ibigwe field in OML 16, which has been in production since 2009. In 2023, The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) announced the granting of an additional 5,000 barrels per day licence to Waltersmith’s Ibigwe field.

Waltersmith also operates a modular refinery that commenced production in 2020, adding value through the production of diesel, naphtha, HPFO, and kerosene. The refinery was lauded by the FG for its role in promoting Nigerian content, a key part of its CSR program which is focused on stakeholder Engagement, particularly for community relations, society, and the environment.

Its CEO, Mr. Abdulrazaq Isa, also chairs the Indigenous Petroleum Producers Group (IPPG), a platform for indigenous producers.

FIRST Exploration and Petroleum Development Company Ltd 

First E&P was founded in 2011 with the goal of becoming the premier indigenous shallow offshore company in Nigeria. The company acquired a 40% working interest in the Anyala Madu Songhai fields (OML 83 and 85) and serves as the operator of these assets, boosting production to 57,000 barrels of oil per day (BOPD) and makes use of a Floating Production Storage and Offloading Unit (FPSO).

In 2024, First E&P reached the milestone of producing and exporting over 50 million barrels of oil. The company is also dedicated to community development, offering programs in health, education, and enterprise.

Managing Director/CEO, Mr. Ademola Adeyemi-Bero was recently appointed as Chairman of the OPEC Board of Governors for 2025 and confirmed as Nigeria’s OPEC Governor for the year 2025.

Petrolin 

Founded in 1992, Petrolin is an international petroleum group with investments in hydrocarbons, mining, and infrastructure across Africa and the Middle East. It produces oil from four fields, with a daily output of 17,000 barrels of oil equivalent (BOE/d), and has a diverse portfolio spanning upstream, midstream, and downstream sectors.

Petrolin is committed to social and environmental responsibility and established the Foundation Espace Afrique (FEA) to promote Africa’s economic, social, and cultural development.

Collective Impact of Renaissance Africa Energy 

The combined strength of these five companies positions the Renaissance Africa Energy Consortium as a formidable force in the Nigerian energy sector. Each member brings unique and proven expertise, technological innovation, and financial resources to the table, creating a powerful blend of capabilities that drive economic growth, alleviate energy poverty, and enhance Nigeria’s competitive advantage in the rapidly evolving energy landscape.

The Nigerian oil and gas sector remains a vital part of the country’s economic growth. Oil and gas account for 40% of Nigeria’s GDP, 70 percent of budget revenues, and 95% of its foreign exchange earnings, making the sector essential for national development. The Renaissance Consortium aims to contribute to increased production, helping boost foreign exchange earnings through exports and addressing Nigeria’s ongoing energy poverty. This will further stimulate economic growth and improve the standard of living for Nigerians.

The Future of Nigeria’s Energy Sector 

The local involvement of Nigerian companies in the oil and gas sector has the potential to address many of the challenges faced by international operators, including community relations and security concerns. The divestment of assets to local firms is likely to create more sustainable and locally driven growth in Nigeria’s oil and gas sector, fostering job creation, higher tax revenues, and the development of domestic industries supporting the sector.

In conclusion, the divestment of Shell’s assets to Renaissance Africa Energy marks a turning point for Nigeria’s energy future. It enables Nigerian companies to expand their operations, gain valuable experience in large-scale production management, and enhance their technical capabilities. This local ownership and expertise will contribute to more resilient, sustainable growth, benefiting both the energy sector and the broader Nigerian economy.