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17Aug24

TotalEnergies has agreed to sell its 10pc stake in Nigeria's SPDC onshore oil and gas joint venture to Africa-focused independent Chappal Energies for $860mn.

Other partners in the SPDC joint venture comprise operator Shell with a 30pc interest, state-owned NNPC with 55pc and Italy's Eni with 5pc. Shell agreed to sell its stake in the joint venture to a consortium of five companies for up to $2.4bn in January. That deal remains subject to a due diligence process by regulators.

The joint venture's assets include around 50 producing oil and gas fields across 18 licences. TotalEnergies will transfer its 10pc interest and all its rights and obligations in 15 of the licences to Chappal. These licences mainly produce oil and netted TotalEnergies around 14,000 b/d of oil equivalent last year.

The other three licences -- OML 23, OML 28 and OML 77 -- mainly produce gas and account for 40pc of supply to the Nigeria LNG (NLNG) joint venture, in which TotalEnergies has a 15pc stake. TotalEnergies will also transfer its 10pc stake in these licences to Chappal but it will retain "full economic interest" in them, it said.

The divestment "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", said TotalEnergies' exploration and production president Nicolas Terraz.

Chappal specialises in taking over and operating mature fields. It agreed a deal in November last year to acquire Norwegian firm Equinor's stake in Nigeria's OML 128 block, a transaction that was finally approved earlier this month. The company said last month that it is contemplating issuing a bond to raise up to $450mn to help it finance acquisitions.

[Source: By Jon Mainwaring, Argus, London, 17Aug24]
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