French multinational oil and gas giant, TotalEnergies SE, has formally launched the sale of its 10% stake in its Nigerian joint venture with Nigerian National Petroleum Company (NNPC) Limited, Shell Petroleum Development Company (SDPC) and Eni.
According to Reuters, a sale document tendering for interest showed that the oil firm appointed Canada’s Scotiabank to lead the sale as the financial adviser to the transaction.
Although the report states that both TotalEnergies and Scotiabank have declined to comment on the latest development, the former had a few weeks ago announced plans to sell its stake in the onshore joint venture.
TotalEnergies had confirmed it was selling its interest in 13 onshore fields and 3 in shallow water, producing over 20,000 barrels of oil equivalent per day. The sale includes infrastructure such as 3,500 km of pipelines connecting to 2 key crude export terminals, Bonny and Forcados.
The French company will keep OMLs (oil mining licences) 23 and 28 and its interest in the associated gas pipeline network that feeds Nigeria LNG.
The divestment by TotalEnergies will be the latest in a series of similar actions by other International Oil Companies (IOCs) like Shell and ExxonMobil, who had both, several months ago, announced plans to divest from their Nigerian oil assets.
These oil majors attributed their divestment in Nigeria’s onshore production to years of sabotage and theft that has degraded assets across the oil-rich delta region.
What you should know
- Recall that in late April, TotalEnergies had attributed its plans to join the bandwagon of other oil majors and sell its stake in an onshore oil production joint venture in Nigeria, to the disruption of local communities which has become a source of great concern.
- The Chief Executive Officer of Total Energies, Patrick Pouyanne, at an earnings conference call, said that the French oil firm will put up for sale its 10% interest in a company operating 20 licenses onshore Nigeria.
- NNPC holds 55% in the joint venture, with Shell, the operator holding a 30% working interest, with Eni holding 5%.
- Oil majors have for over a decade been selling their onshore and shallow water assets to Nigerian independent producers.
- Recall that in July 2021, Shell launched a major divestment of its Nigerian asset with the planned sale of the company’s shallow-water and onshore asset interests in the SPDC joint venture, which supplies around 10% of Nigeria’s gas demand.
- This was because it no longer views its activities in the Niger Delta as core to its ongoing strategy, which is driven by the Environmental, Social and Governance (ESG) pressure from its investors.
- On February 25, Seplat Energy Plc announced an agreement to acquire the entire share capital of Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation, Delaware for $1.28 billion.
This could be a blessing or a curse depending on how NNPC local oil companies and the indigenous inhabitants cooperate.