The controversial $2.4 billion divestment of Shell Petroleum Development Company of Nigeria Limited (SPDC) to Renaissance Africa Energy Holdings has escalated as Global Gas & Refining Limited (GGRL) intensifies its legal opposition.Â
The ongoing dispute threatens to derail the transaction and raises concerns about judicial integrity and regulatory compliance in Nigeria’s oil and gas sector.
Shell Accused of Defying Court Orders
Global Gas has strongly criticized the divestment, accusing Shell and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) of disregarding a Federal High Court order that prohibits any action on the sale until ongoing litigation is resolved.
In a public statement, Global Gas Chairman Kenneth Yellowe condemned Shell’s announcement of the deal, citing Suit No: FH/ABJ/CS/413/2024 as evidence of the company’s alleged defiance of judicial authority. According to Yellowe, Shell’s actions demonstrate a blatant disregard for Nigeria’s legal system, calling into question the enforceability of court rulings against multinational corporations operating in the country.
Regulatory Compliance Under Scrutiny
Beyond Shell’s alleged violations, Global Gas has also raised concerns over the role of the NUPRC in approving the transaction. The company claims that the commission, led by Chief Executive Gbenga Komolafe, ignored a pending motion for an injunction and submitted a legally binding affidavit to the court. The affidavit reportedly required NUPRC to maintain the status quo until a final ruling.
By proceeding with the approval of the divestment, Global Gas argues that the regulatory body has undermined judicial authority, setting a dangerous precedent that could erode investor confidence in Nigeria’s business environment.
Indigenous Firms at a Disadvantage
One of Global Gas’s key arguments is that the divestment disproportionately favors foreign investors while sidelining indigenous oil and gas companies. According to the company, the transaction reflects a broader systemic issue where multinational corporations are given preferential treatment over local firms, further deepening economic inequalities within Nigeria’s energy sector.
This legal battle is rooted in a decades-long dispute between Global Gas and SPDC. The Nigerian company claims that Shell’s alleged obstructionist tactics undermined its $500 million investment in the sector. Global Gas insists that Shell’s current divestment strategy is a calculated attempt to evade accountability for past actions while the case remains unresolved in court.
Implications for Nigeria’s Energy Sector
As the legal battle intensifies, industry stakeholders closely watch the outcome, as it could set a precedent for future divestments and regulatory oversight in Nigeria. A ruling favoring Global Gas could reinforce the judiciary’s power to enforce corporate accountability. In contrast, a decision favoring Shell may raise concerns about the influence of multinational companies over the legal system.
The dispute remains a critical test of Nigeria’s regulatory and legal frameworks, with significant implications for investor confidence, indigenous participation in the oil sector, and the country’s overall business climate.
