TotalEnergies Sells 10% SPDC JV Stake in Nigeria to Chappal Energies

TotalEnergies has announced that its subsidiary, TotalEnergies EP Nigeria, has entered into a Sale and Purchase Agreement (SPA) with Chappal Energies. This agreement involves the sale of TotalEnergies' 10% interest in the Shell Petroleum Development Company of Nigeria Joint Venture (SPDC JV) licenses in Nigeria. The divestment aligns with TotalEnergies' strategic focus on optimizing its portfolio and reallocating resources to core assets. This transaction underscores TotalEnergies' commitment to enhancing operational efficiency and fostering partnerships in the energy sector.

The SPDC JV is an unincorporated joint venture consisting of Nigerian National Petroleum Corporation Ltd (NNPC) with a 55% stake, Shell Petroleum Development Company of Nigeria (SPDC) holding 30% as the operator, TotalEnergies EP Nigeria with a 10% stake, and NAOC holding 5%. This joint venture oversees 18 licenses in the Niger Delta region, playing a significant role in Nigeria's oil and gas sector. The recent sale agreement between TotalEnergies EP Nigeria and Chappal Energies involves TotalEnergies' divestment of its 10% interest in this JV.

Under the SPA signed with Chappal Energies, TotalEnergies EP Nigeria will divest its 10% participating interest and all associated rights and obligations in 15 SPDC JV licenses, primarily focused on oil production. In 2023, production from these licenses accounted for approximately 14,000 barrels of oil equivalent per day for TotalEnergies. This transaction is part of TotalEnergies' strategic efforts to optimize its portfolio and focus on core assets, while enabling Chappal Energies to enhance its presence and capabilities in the Nigerian oil sector.

Also, TotalEnergies EP Nigeria will transfer its 10% participating interest in 15 oil-producing SPDC JV licenses, which represented approximately 14,000 barrels of oil equivalent per day in 2023. Additionally, TotalEnergies will transfer its 10% interest in three gas-producing licenses (OML 23, OML 28, and OML 77) to Chappal Energies while retaining full economic interest in these licenses. These gas licenses currently account for 40% of Nigeria LNG's gas supply.

The parties have executed a definitive agreement for the transaction, with a total consideration of USD 860 million. Completion of the sale (closing) is contingent upon customary closing conditions, including the receipt of necessary regulatory approvals. This significant deal underscores the strategic alignment and mutual benefits for both TotalEnergies and Chappal Energies within the Nigerian oil and gas sector.

Nicolas Terraz, President of Exploration & Production at TotalEnergies, highlighted the company's strategic portfolio management in Nigeria, emphasizing their focus on offshore oil and gas assets. Following the recent launch of the Ubeta gas development on OML58 license, TotalEnergies has decided to divest its interest in SPDC JV licenses to concentrate solely on the integrated gas value chain in onshore Nigeria. This strategic move aims to ensure continued feed gas supply to Nigeria LNG, aligning with TotalEnergies' commitment to optimizing its operations and maintaining a sustainable presence in Nigeria's energy sector.