TotalEnergies agrees deal to sell its Nigeria onshore oil assets to Chappal Energies for $860 million — report

Date:

French oil major, TotalEnergies, is planning to sell its onshore oil asset in Nigeria to an indigenous oil company, Chappal Energies, for the sum of $860 Million, as per Bloomberg report.

The deal, set to be finalized by December 31, 2024, represents TotalEnergies’ strategic move to divest from Nigeria’s onshore segment in favour of a more secure offshore environment.

The transaction involves acquiring a 10% stake in 15 oil mining leases, as well as ownership of the Forcados and Bonny export terminals, both critical assets within the Shell Petroleum Development Company (SPDC) joint venture.

Chappal’s financing will be sourced from an entity affiliated with TotalEnergies or a financial institution chosen by the French company, as stated.

Trading firm Trafigura and a consortium of global banks are also contributing funds.

Backstory

Nairametrics had earlier reported that TotalEnergies was planning to divest its minority stake in a significant Nigerian onshore oil joint venture.

The CEO of the oil major, Patrick Pouyanne, announced this during the company’s financial results presentation in February, 2024.

Pouyanne said that the company intends to restructure its portfolio, citing the growing challenges associated with oil production in the Niger Delta as a primary reason for the decision.

“We want to divest our share of SPDC, and we are looking to reshape the portfolio.

“Fundamentally it’s because producing this oil in the Niger Delta is not in line with our [Health, Security, and Environmental] policies, it’s a real difficulty,” Pouyanne said.

Pouyanne, however, stated that the company intends to retain its Nigerian gas assets, considering them essential for the company’s future expansion in liquefied natural gas development over the upcoming years.

The Shell Petroleum Development Company of Nigeria Limited (SPDC), in which TotalEnergies holds a 10% interest, has struggled with numerous onshore oil spills stemming from theft, sabotage, and operational challenges, resulting in expensive repairs and notable legal battles over the years.

What you should know

TotalEnergies is joining the trend of International Oil Companies (IOCs) divesting from Nigeria’s onshore sector after decades of operations.

Despite this strategic shift, the French conglomerate remains a significant player in the country’s offshore fields.

The Nigerian onshore oil industry has recently seen major international oil companies exit, allowing local players to step in.

In May 2024, Shell announced its agreement to sell its 30% stake in SPDC to a consortium primarily composed of local companies for up to $2.4 billion.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Share post:

Subscribe

spot_imgspot_img

Popular

More like this
Related

Kemz Mama Acting Career Was Almost an Impossible One

We all see the glitters on screen and applaud...

Lekki Free Zone’s turnover hits $5b

Managing Director, Lekki Free Zone (LFZ), Bolatito Ajibode has...

EFCC files objection to suit disowned by Sanwo-Olu

The Economic and Financial Crimes Commission (EFCC) has urged...

UBA announces appointment of Henrietta Ugboh as an Independent Non-Executive Director

UBA announces appointment of Henrietta   Africa’s Global Bank, United Bank...