French energy giant TotalEnergies has sold its 10% stake in a major Nigerian onshore oil venture to Chappal Energies, a Mauritius-based company, for $860 million.
This move signifies TotalEnergies’ strategic shift away from onshore oil production in Nigeria, riddled with operational challenges and environmental issues.
The divested stake involves interests in 15 oil-producing licenses, with a combined daily output of 14,000 barrels of oil equivalent for TotalEnergies in 2023.
However, the sale excludes three gas licenses that contribute significantly (40%) to TotalEnergies’ Nigeria LNG supply.
Interestingly, while the participation stake in these gas licenses has been sold to Chappal Energies, TotalEnergies will retain its share of gas production and access to related infrastructure for continued LNG supply.
“This divestment allows us to concentrate our efforts solely on the integrated gas value chain in onshore Nigeria, ensuring uninterrupted gas supply to the Nigeria LNG plant,” explained Nicolas Terraz, President of Exploration & Production at TotalEnergies.
The transaction is subject to regulatory approvals and is expected to finalize by the end of 2024.
This move follows Shell’s decision earlier this year to offload its 30% stake in the same venture for a sum reaching $2.4 billion.
The remaining partners in the venture are the Nigerian National Petroleum Corporation (NNPC) with a 55% stake and Italy’s Eni holding 5%.
TotalEnergies’ exit aligns with a recent trend of major oil companies like Exxon Mobil, Eni, and Equinor divesting from Nigerian assets.
These companies are prioritizing newer and more lucrative operations elsewhere.
Despite this shift, TotalEnergies remains a key player in Nigeria’s offshore oil production, averaging a daily output of 219,000 barrels of oil equivalent in 2023.
