After Shell Speaks on Exit, Another Energy Giant Sells Company Shares to New Owner
- In exchange for its portion of the country's oil assets, Chappal Energies has agreed to pay TotalEnergies $860 million
- The money for Chappal will come from either a TotalEnergies-affiliated organisation or a financial institution
- Trafigura, a trading company, and a syndicate of foreign banks are also providing funding
As major oil companies continue to pull out of troubled onshore operations in Nigeria, Chappal Energies Mauritius Ltd. has agreed to pay $860 million to acquire TotalEnergies SE's 10% interest in the country's oil and gas assets.
Source: Getty Images
Chappal Energies said in a statement on Wednesday that the agreement includes a 10% stake in 15 oil mining leases as well as the Forcados and Bonny export terminals, which are a part of the Shell Petroleum Development Co. joint venture.
TotalEnergies, the massive French energy company, stated in a separate statement that production from those licenses accounted for about 14,000 barrels equivalent per day for the company last year.
Additionally, Bloomberg reported that TotalEnergies will provide Chappal Energies its 10% stake in the three additional SPDC JV licenses, which produce primarily gas.
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Trend continues
For over ten years, Nigerian oil giants have been selling offshore and shallow water blocks to local producers, putting infrastructure at risk from frequent petroleum theft.
The trend is quickening as foreign companies concentrate on deep-water projects and liquefied natural gas in the biggest oil producer in Africa.
Nicolas Terraz, president of TotalEnergies' exploration and production, said in a statement that the agreement enables the company to concentrate on offshore oil, while its onshore operations are designed to ensure the continuity of feed gas supply to Nigeria LNG in the future.
An organisation connected to TotalEnergies or financial institutions chosen by the French business would fund Chappal, the statement said. Funds are also being provided by a syndicate of multinational banks and trading business Trafigura Group. By December 31st, the deal should close.
Chappal Energies and Norway's Equinor ASA reached an agreement in November of last year to purchase Nigerian oil and gas assets for an undisclosed sum.
Closing of the deal is anticipated by December 31.
Shell speaks on leaving Nigeria
After almost a century of operations, British energy giant Shell has decided to sell its Nigerian onshore oil and gas division for up to $2.4 billion to a group of five primarily local businesses.
The company will be sold to Renaissance, comprising four exploration and production companies based in Nigeria - ND Western, Aradel Energy, First E&P, and Waltersmith,- as well as the trading and investment firm Petrolin, headquartered in Switzerland.
Completion of the transaction is subject to approvals by the Federal Government of Nigeria and other conditions.
Operating in West Africa since the 1930s, Reuters reported that Shell has endured years of hardship due to hundreds of oil leaks at its onshore facilities, which resulted in expensive repairs and high-profile legal actions due to theft, sabotage, and operational problems.
Another country to join Nigeria to produce oil
Legit.ng reported that Namibia has emerged as a hub for oil exploration following several recent researches conducted near its coast.
Though it hasn't yet produced any oil or gas, big players in the oil industry like TotalEnergies and Shell have found deposits estimated to be worth 2.6 billion barrels, with production in the country in southern African nation anticipated to begin around 2030
There have been discoveries in the Orange Basin and there are other prospective areas, including Luderitz, Kavango and Walvis basins.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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Source: Legit.ng
