Royal Dutch Shell’s plan to sell its Nigerian assets is likely to face challenges from the inability of Nigerian lenders to provide sufficient cash. Nigeria’s biggest lender, Guaranty Trust Bank Plc said it did not see the likelihood of any client raising the estimated $2.3 billion required to acquire the Shell assets. It said that such a deal would need syndication of up to $1.8 billion, which could be very tough to raise locally at the moment.
In May, Shell said it would exit its onshore oil position in Nigeria, which it deemed incompatible with its long-term strategy. However, Nigerian banks’ financing capacity has waned considerably due to lower oil prices and an economic downturn arising from the COVID-19 pandemic, which curbed Nigeria’s foreign-currency inflows and reserves.
