Shell will buy TotalEnergies’ 12.5% non-operated stake in the deepwater oilfield Bonga offshore Nigeria, where the UK-based supermajor plans to develop another major project.
Shell’s subsidiary operating the Bonga oilfield, Shell Nigeria Exploration and Production Company (SNEPCo), has signed an agreement to buy the French supermajor’s 12.5% stake in the OML 118 Production Sharing Contract, an oil mining lease offshore Nigeria that includes the Bonga field, Shell said on Thursday.
After the deal is completed, Shell will increase its stake in the OML 118 lease to 67.5% from 55%.
Production from the Bonga field began in 2005, with a capacity to produce 225,000 barrels of oil per day.
TotalEnergies noted that the amount of the transaction is $510 million.
The sale is part of the French group’s strategy to high-grade its portfolio, while focusing on its operated gas and offshore oil assets in Nigeria, said Nicolas Terraz, President Exploration & Production at TotalEnergies.
Shell, for its part, is doubling down on the Bonga field after announcing last December the final investment decision for the development of the Bonga North deep-water project.
The Bonga North project will be a subsea tie-back to the Shell-operated Bonga Floating Production Storage and Offloading (FPSO) facility.
Bonga North currently has an estimated recoverable resource volume of more than 300 million barrels of oil equivalent (boe) and will reach a peak production of 110,000 barrels of oil a day (bpd), with first oil anticipated by the end of the decade, the supermajor said.
In today’s release to announce the acquisition of TotalEnergies’ stake, Peter Costello, Shell’s President, Upstream, said, “Following our final investment decision on Bonga North last year, this acquisition brings another significant investment in Nigeria deep-water that contributes to sustained liquids production and growth in our Upstream portfolio.”
For its part, Nigeria is urging the oil companies operating in the country to collaborate to increase oil output in the producer that hasn’t been able to pump to its OPEC quota for years.
By Tsvetana Paraskova for Oilprice.com
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