Mauritius-based Chappal Energies has acquired a minority share in TotalEnergies’ major Nigerian onshore oil joint venture for $860 million.
The CEO of the French energy group, Patrick Pouyanne, stated in February that TotalEnergies was considering exiting its 10% stake in the Shell Petroleum Development Company of Nigeria Limited (SPDC), which has faced numerous oil spills due to theft, sabotage, and operational challenges, resulting in costly repairs and high-profile legal battles.
Chappal Energies focuses on deep value investments and distressed brownfield upstream assets in the Niger Delta region. The company stated that the deal includes 15 licences producing mostly oil, with a total production of 14,000 barrels of oil equivalent daily in 2023. Three additional licences produce mostly gas and currently account for 40% of TotalEnergies’ Nigeria LNG gas supply.
According to TotalEnergies, it has sold its participation stake in the gas licences to Chappal Energies. However, the share of production will remain in TotalEnergies’ portfolio, along with access to the associated infrastructure and pipelines to supply the Nigeria LNG plant with gas.
“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 of Exploration & Production at TotalEnergies.
Earlier this year, Shell agreed to sell its 30% stake in SPDC to a conglomerate of five mostly local companies for about $2.4 billion. The Nigerian National Petroleum Corporation (NNPC) holds 55% of the joint venture, while Italy’s Eni has 5%.
In recent years, Norway’s Equinor, ExxonMobil, and Eni have all disposed of their assets in Nigeria to focus on newer, more profitable ventures elsewhere. Despite this divestment, with its 219,000 barrels of oil per day in 2023, TotalEnergies remains a major operator of offshore fields in Nigeria.