TotalEnergies sells 10% stake in SPDC JV licenses to Chappal Energies for $860m

TotalEnergies, a major player in the global energy sector, has made a significant move by selling its 10% stake in the SPDC JV licenses in Nigeria to Chappal Energies. The deal, valued at USD 860 million, involves TotalEnergies EP Nigeria, a subsidiary of TotalEnergies, transferring its interests in certain oil and gas licenses in the Niger Delta. This strategic divestment is part of TotalEnergies’ ongoing portfolio management in Nigeria, focusing on enhancing its offshore oil and integrated gas operations.

The SPDC JV, an unincorporated joint venture, includes partners such as the Nigerian National Petroleum Corporation Ltd (55%), Shell Petroleum Development Company of Nigeria (30%, operator), TotalEnergies EP Nigeria (10%), and NAOC (5%). It holds 18 licenses within the Niger Delta, which are pivotal to the region’s oil and gas production.

Under the terms of the sale and purchase agreement (SPA) with Chappal Energies, TotalEnergies EP Nigeria will relinquish its 10% participating interest and all associated rights and obligations in 15 licenses primarily producing oil. These licenses collectively contributed about 14,000 barrels per day to TotalEnergies’ share in 2023. Furthermore, the agreement includes the transfer of a 10% interest in three other licenses predominantly producing gas—OML 23, OML 28, and OML 77—while TotalEnergies retains full economic interest in these, which are crucial for supplying 40% of Nigeria LNG’s gas.

This transaction is aligned with TotalEnergies’ strategy to consolidate its footprint in Nigeria’s more lucrative offshore oil and gas sectors. “TotalEnergies continues to actively manage its portfolio in Nigeria, in line with its strategy to focus on its oil offshore and gas assets,” stated Nicolas Terraz, President of Exploration & Production at TotalEnergies. He emphasized that the sale is part of a broader strategy to concentrate onshore efforts on the integrated gas value chain, ensuring a stable supply of feed gas to Nigeria LNG in the future.

TotalEnergies has a longstanding presence in Nigeria, exceeding 60 years, with current operations employing over 1,800 individuals across various business segments. Nigeria remains a critical contributor to TotalEnergies’ hydrocarbon production, with approximately 219,000 barrels of oil equivalent per day produced in 2023. The company also operates an extensive network of around 540 service stations across Nigeria. In all its ventures, TotalEnergies remains committed to the socio-economic development of the regions it operates in, fostering close relationships with local communities.

This deal marks a pivotal shift in TotalEnergies’ strategy in Nigeria, redirecting focus towards more sustainable and profitable ventures in the oil and gas domain, thereby reinforcing its commitment to the country’s energy sector and its own long-term corporate strategy.