Shell’s $2.4bn Nigerian Asset Sale Tops Africa’s M&A Deals—Report

A $2.4 billion asset sale by Shell in Nigeria has emerged as the largest merger and acquisition (M&A) transaction in Africa this year, according to a recent report. The deal, part of Shell’s divestment strategy, underscores the growing trend of multinational oil and gas companies reducing their onshore operations in Nigeria to focus on offshore assets and cleaner energy initiatives.

The sale involves several onshore oilfields and associated infrastructure, which Shell is transferring to local and regional operators. Analysts view this divestment as a strategic move to mitigate risks associated with onshore operations, including environmental liabilities, regulatory pressures, and community-related challenges.

Shell’s decision reflects a broader shift in the energy sector, where global players are rebalancing portfolios to align with sustainability goals and adapt to evolving market conditions. “This transaction signals Shell’s focus on repositioning its portfolio while creating opportunities for indigenous firms to take a larger role in Nigeria’s oil and gas sector,” a market expert noted.

The report highlights how the deal has invigorated M&A activity across Africa, with the energy sector leading transactions due to similar divestments by major oil firms. Beyond boosting the local economy, these deals are seen as critical to fostering indigenous participation and capacity-building in the sector.

However, experts have raised concerns about the readiness of local operators to manage these assets effectively. They emphasized the importance of technical expertise, adequate financing, and robust governance structures to maximize the value of the transferred assets.

For Nigeria, Shell’s asset sale represents a significant opportunity to deepen local involvement in the oil and gas industry, which remains a cornerstone of the country’s economy. The government has lauded the deal as a step towards achieving energy sector reforms and enhancing local content development.

As the largest M&A deal in Africa this year, Shell’s divestment underscores the evolving dynamics of the continent’s energy landscape. It serves as a reminder of the need for strategic planning to balance economic, environmental, and social priorities in the oil and gas sector.