The company said closing of the deal is subject to customary conditions, including regulatory approvals.
Oil major TotalEnergies announced that its Nigerian subsidiary signed a sale and purchase agreement (SPA) with Chappal Energies for the sale of its 10 per cent interest in the Shell Petroleum Development Company (SPDC) Joint Venture licences in Nigeria.
The company, in a statement Wednesday, said the transaction was concluded for a firm consideration of $860 million.
It noted that closing of the deal is subject to customary conditions, including regulatory approvals.
Under the agreement signed with Chappal Energies, TotalEnergies said it will sell to Chappal Energies its 10 per cent participating interest and all its rights and obligations in 15 licences of SPDC JV, which are producing mainly oil.
It explained that production from these licences represented approximately 14,000 barrels equivalent per day in company share in 2023.
"TotalEnergies EP Nigeria will also transfer to Chappal Energies its 10 per cent participating interest in the three other licences of SPDC JV which are producing mainly gas (OML 23, OML 28 and OML 77), while retaining full economic interest in these licences which currently account for 40 per cent of Nigeria LNG gas supply," the statement said.
The President Exploration & Production of TotalEnergies, Nicolas Terraz, said "TotalEnergies continues to actively manage its portfolio in Nigeria, in line with its strategy to focus on its oil offshore and gas assets.
"After the launch of the Ubeta gas development on OML58 license last month, this divestment of our interest in SPDC JV licences allows us to focus our onshore Nigeria presence solely on the integrated gas value chain and is designed to ensure the continuity of feed gas supply to Nigeria LNG in the future."
SPDC JV is an unincorporated joint venture between Nigerian National Petroleum Corporation Ltd (55 per cent), Shell Petroleum Development Company of Nigeria (30 per cent, operator), TotalEnergies EP Nigeria (10 per cent) and Nigerian Agip Oil Company Limited (NAOC) (5 per cent), which holds 18 licences in the Niger Delta.
Background
The company had in December 2023 said it would invest as much as $6 billion in Nigeria in coming years, particularly in gas production, as it plans to cut down investment in hydrocarbons and transition into cleaner energy.
TotalEnergies is a multinational energy company operating in more than 130 countries. For over 50 years, the company has remained a leader in the downstream sector of the Nigerian oil and gas industry.
In May 2022, the company launched a sale of its minority stake in a Nigerian oil joint venture.
At the time, the company said it was selling its interest in 13 onshore fields and three in shallow water, producing over 20,000 barrels of oil equivalent per day.
The sale includes infrastructure such as 3,500 km of pipelines connecting to two key crude export terminals, Bonny and Forcados.
Announcing its plans to sell its minority stake in a major Nigerian oil joint venture in February, the firm said it is looking to reshape its portfolio since producing oil in the Niger Delta is not in line with its health, security and environmental policies.
"We want to divest our share of SPDC, and we are looking to reshape the portfolio.
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"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," Patrick Pouyanne, TotalEnergies chief executive officer was quoted by Reuters as saying at the company's annual results presentation at the time.
Last month, the Nigerian National Petroleum Company Limited (NNPC Ltd) and TotalEnergies JV signed a $550 million Final Investment Decision (FID) on the Ubeta Field Development Project.
Speaking at the signing at the time, the Senior Vice President Africa, Exploration & Production, TotalEnergies, Mike Sangster, said the project is part of the company's strategy to ensure more sustainable energy and less emissions in line with the global energy transition drive.
TotalEnergies is the latest multinational to give up its onshore assets for deep-water fields.
