British energy giant Shell has agreed to sell its domestic gas distribution business in Nigeria, further reshaping its operations in the West African country amid unresolved legal battles over oil pollution.

The company announced on Tuesday that Vaaris Energy, a privately owned Nigerian firm, will acquire its entire interest in Shell Nigeria Gas Group. Financial terms were not disclosed, and the transaction requires regulatory approvals. Operations will continue under Shell until completion.

Established in 1998, the business supplies more than 130 industrial and commercial customers through around 170 kilometers of pipelines across Ogun, Abia, and Rivers states. Shell said the sale would simplify its portfolio and concentrate investment where it has competitive strengths.

“We believe this agreement provides a much stronger platform for the business’ next chapter under new ownership,” Shell’s chair in Nigeria, Elohor Aiboni, said. The deal covers gas distribution rather than production or exports. Shell will retain its deepwater oil and gas operations and its interest in Nigeria LNG.

The company, active in Nigeria since 1937, completed the sale of its onshore subsidiary, Shell Petroleum Development Company of Nigeria (SPDC), to the Renaissance consortium in March 2025. The agreement announced in 2024 provided for payments of up to $2.4 billion.

Shell’s operations in Africa’s most populous nation have been marked by long-running disputes over oil pollution. Residents of Ogale and Bille in the Niger Delta are seeking compensation and cleanup over spills they say devastated their land and waterways.

In September, the UK High Court allowed Bille claimants to argue that Shell was responsible for all oil pollution in their region from 2011-2013, including damage not traced to individual spills. Trial is scheduled for May 2027. A 2011 UN assessment found benzene in wells in Nisisioken Ogale at more than 900 times World Health Organization guidelines and estimated that restoring Ogoniland could take 25 to 30 years. Shell disputes the claims, blaming most pollution in the case on oil theft, sabotage, and illegal refining.

French oil major TotalEnergies has also faced criticism from Nigerian communities and activists over oil spills and environmental damage. Its planned withdrawal from onshore oil operations suffered a setback in September 2025 when regulators revoked approval for an $860 million asset sale to Chappal Energies over unmet financial commitments, before the company signed a replacement agreement with Vaaris in January this year.