French energy company TotalEnergies has finally divested its 10% stake in the Shell Petroleum Development Company of Nigeria Limited (SPDC) for an impressive $860 million, following years of legal and environmental challenges related to the oil giant’s Nigerian onshore ventures.
The sale marks the latest step in TotalEnergies’ ambitious strategy to reduce its carbon footprint and pursue a greener energy future, as CEO Patrick Pouyanne signalled in his remarks earlier this year. Chappal Energies, a Mauritius-based firm, is now set to take over the minority shareholding in SPDC, Reuters reports.
Chappal Energies specialises in investing in undervalued and distressed brownfield upstream assets in the Niger Delta region.
The recently acquired assets from TotalEnergies comprise a 10% interest in 15 licenses, primarily producing oil, with a net production of 14,000 barrels of oil-equivalent per day in 2023.
Additionally, three licenses primarily producing gas are part of the sale, which currently account for 40% of TotalEnergies’ gas supply to the Nigeria LNG project.
TotalEnergies has announced the sale of its participation stake in the gas licenses to Chappal Energies. However, the company will retain the share of production from these licenses, ensuring continued access to the associated infrastructure and pipelines. This arrangement will enable TotalEnergies to maintain its gas supply to the Nigeria LNG plant.
“This 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 Nicolas Terraz, president exploration & production, at TotalEnergies.
The transaction is anticipated to be completed by the end of the year, pending regulatory approvals.
In a separate agreement earlier this year, Shell agreed to divest its 30% stake in SPDC to a consortium of five primarily local companies for a consideration of up to $2.4 billion.
The ownership structure of SPDC comprises NNPC (55%), Eni (5%), and TotalEnergies (10%), among others. Notably, Exxon Mobil, Eni, and Equinor have all divested assets in Nigeria in recent years to focus on more profitable operations in other regions.
