TotalEnergies has announced a major portfolio shift through the sale of its 10% stake in the SPDC Joint Venture (JV) licenses in Nigeria. This move comes as TotalEnergies EP Nigeria, a subsidiary of TotalEnergies, enters into a sale and purchase agreement (SPA) with Chappal Energies.
Transaction Overview
The SPA entails the transfer of TotalEnergies EP Nigeria’s 10% participating interest in 15 SPDC JV licenses to Chappal Energies. These licenses are primarily involved in oil production and contributed approximately 14,000 barrels of oil equivalent per day to TotalEnergies’ share in 2023. Additionally, TotalEnergies will also transfer its 10% interest in three other SPDC JV licenses—OML 23, OML 28, and OML 77—which focus on gas production. Despite this transfer, TotalEnergies will maintain full economic interest in these gas-producing licenses, which play a crucial role in supplying 40% of Nigeria LNG’s gas.
Financial Terms and Approval Process
The divestment is valued at USD 860 million, with the completion of the transaction subject to standard conditions, including regulatory approvals. This significant financial transaction is part of TotalEnergies’ broader strategy to streamline its operations and focus on its core assets.
Strategic Shift
Nicolas Terraz, President of Exploration & Production at TotalEnergies, highlighted that the sale aligns with the company’s strategy to concentrate on its offshore oil and gas assets. He noted that this divestment would enable TotalEnergies to refocus its onshore activities in Nigeria on the integrated gas value chain. This strategic realignment is intended to secure the continuity of feed gas supply to Nigeria LNG and enhance operational efficiency.
Impact and Future Plans
The decision to sell the SPDC JV licenses is also a response to evolving market dynamics and a strategic realignment following the recent launch of the Ubeta gas development on the OML58 license. TotalEnergies’ move underscores its commitment to optimizing its asset portfolio and investing in high-potential areas that align with its long-term business objectives.
Through this transaction, TotalEnergies aims to enhance its operational focus, drive efficiency, and ensure a stable supply of gas to key Nigerian LNG facilities, reinforcing its position in the African energy sector.
