The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has approved TotalEnergies SE’s sale of its 12.5 percent stake in Oil Mining Lease (OML) 118, which includes the producing Bonga field, to Shell PLC and Eni SpA for $510 million.
“According to the details of the agreement, TotalEnergies will transfer 10 percent of its interest to SNEPco [Shell Nigeria Exploration and Production Co Ltd] at a cost of $408 million while NAE [Eni’s Nigerian Agip Exploration Ltd] will pay $102 million for the remaining 2.5 percent”, the NUPRC said in a statement on its website.
The transaction has raised operator Shell’s stake to 65 percent and Eni’s to 15 percent, based on the NUPRC statement. Exxon Mobil Corp retains 20 percent through Esso Exploration and Production Nigeria Ltd.
Shell’s announcement of the deal on May 29 said it would acquire the entirety of TotalEnergies’ interest. That would have resulted in a 67.5 percent stake for Shell.
The transaction remains subject to a ministerial consent, the NUPRC said. “The commission therefore expects SNEPco and NAE to pay five percent and two percent respectively of the transaction purse on the total value of $510 million as premium on ministerial consent and processing fees”, it said.
“The assignees are also to give an undertaking in favor of the commission that they will bear all the decommissioning and abandonment liabilities and the host community liabilities owed by TotalEnergies”.
“SNEPco and NAE have demonstrated both technical and managerial competence to optimally contribute to the upstream operations (explore, develop and produce) in OML 118″, the NUPRC said.
“Based on the presentations and documents submitted, there is clear evidence that they have access to funding to meet their financial obligations”, it added.
Located in deep waters 120 kilometers (74.56 miles) south of the Niger Delta, OML118 contains the Bonga field, which started production 2005 and has a capacity of 225,000 barrels of oil per day (bopd), and the Bonga North field, which the consortium approved 2024. The partners expect to put Bonga North into production by 2030 with a capacity of 110,000 bopd, Shell said December 16, 2024, announcing the FID (final investment decision).
TotalEnergies said the divestment of its OML 118 ownership is part of its efforts to refocus investment in the West African country to its operated gas and offshore oil assets.
Earlier this year Shell completed the sale of its subsidiary in the Niger Delta as it also concentrates on deepwater and integrated gas assets. In the $1.3-billion transaction, the consortium Renaissance Africa took over Shell Petroleum Development Company of Nigeria Ltd (SPDC) and consequently acquired a 30 percent operating interest in the SPDC Joint Venture.
The SPDC JV holds 15 onshore oil mining leases (OMLs) and three shallow-water OMLs, according to Shell.
The NUPRC had held off the divestment of SPDC to assess environmental liabilities, according to a statement by the commission April 29, 2024.
To contact the author, email jov.onsat@rigzone.com
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