Energy major Shell has agreed to sell its onshore subsidiary in Nigeria to a consortium of five companies for up to $2.4 billion.

The British energy company has reached an agreement to sell its Nigerian onshore subsidiary The Shell Petroleum Development Company of Nigeria Limited (SPDC) to Renaissance, a consortium of five companies comprising four exploration and production companies based in Nigeria, and an international energy group.

Under the terms of the agreement, Shell will be paid $1.3 billion  while the buyers will make an additional payment of up to $1.1 billion relating to prior receivables at completion.

Following completion, Shell will retain a role in supporting the management of SPDC JV facilities that supply a major portion of the feed gas to Nigeria LNG (NLNG), it said in a statement on Tuesday.

Shell's SPDC Limited operates and has a 30% stake in the SPDC joint venture (JV) that holds 18 onshore and shallow water mining leases. SPDC will remain the operator.

The SPDC JV is an unincorporated joint venture comprised of SPDC Ltd (30%), the government owned Nigerian National Petroleum Corporation (55%), Total Exploration and Production Nigeria Ltd (10%) and Nigeria Agip Oil Company Ltd (5%).

“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” said Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director.

Renaissance is formed of ND Western, Aradel Energy, First E&P, Waltersmith and Petrolin.

Shell has three other main businesses in Nigeria that are outside the scope of this transaction:

-Shell Nigeria Exploration and Production Company Limited (SNEPCo), which produces oil and gas in the deepwater Gulf of Guinea;

-Shell Nigeria Gas Limited (SNG), which provides gas to domestic industrial and commercial customers;

-Daystar Power Group, which provides integrated solar power to commercial and industrial business across West Africa.

(Writing by Brinda Darasha; editing by Seban Scaria)