Nigeria’s oil and gas industry witnessed a flurry of business deals such as partnerships, acquisitions, and divestments in 2024.
In the upstream sector, the year saw international oil giants like Shell and TotalEnergies relinquish their assets to local players like Seplat Energy and Oando PLC.
We also saw ambitious acquisitions and partnership deals involving IOCs and indigenous oil companies.
While divestments and exits were witnessed mostly in onshore operations, more investments by IOCs were observed in the offshore segment.
Experts suggest that the IOCs do not want to deal with local issues such as pipeline vandalism and environmental pollution, while local companies have been hailed for their investment in this area despite the risks.
The year also featured significant financial investment decisions and partnerships that would shape the future of Nigeria’s energy industry.
Here are some of the major deals in Nigeria’s oil and gas industry in 2024.
Equinor
The Norwegian energy firm, Equinor ASA finalised the sale of its Nigerian assets, a 53.85% ownership in oil and gas lease OML 128, including a 20.21% stake in the Agbami field, to Chappal Energies for up to $1.2 billion.
The sale signifies the exit of Equinor Nigeria Energy Company (ENEC) from Nigeria as the parent company said it planned to “deepen further in countries where Equinor can add the most value and build a more focused and robust international portfolio.”
The deal, executed through Project Odinmim a special-purpose vehicle owned by Chappal Energies—was finalized this month, after several months of delay by Nigerian regulators.
ExxonMobil sold Nigerian assets to Seplat Energy
Seplat Energy Plc, listed on both the Nigerian Exchange Limited and the London Stock Exchange, also completed the acquisition of Mobil Producing Nigeria Unlimited MPNU from ExxonMobil Corporation.
- The acquisition of the onshore asset is expected to double Seplat’s production capacity to approximately 120,000 barrels of oil equivalent per day.
- The deal valued at $1.2 billion was initiated in February 2022 but delayed by regulatory review until December 2024.
TotalEnergies sale of onshore assets
In a deal expected to be finalised in the next couple of weeks, TotalEnergies has decided to divest from Nigeria’s onshore operations in favour of a more secure offshore environment by selling its 10% stake in the Shell Petroleum Development Company to an Indigenous company, Chappal Energies.
- SPDC JV is an onshore subsidiary of oil giant, Shell which has been sold to a consortium of local companies.
- TotalEnergies Nigeria planned to transfer its 10% interest and all associated rights and obligations in 15 SPDC JV licenses to Chappal Energies.
- In 2023, production from these licenses accounted for roughly 14,000 barrels of oil equivalent per day for TotalEnergies.
- Additionally, TotalEnergies EP Nigeria will sell its 10% interest in three other SPDC JV licenses (OML 23, OML 28, and OML 77), which focus on gas production, to Chappal Energies.
- However, TotalEnergies will retain full economic rights in these gas-producing licenses, which currently provide 40% of the gas supply to Nigeria LNG.
Oando acquires Agip
This year, Oando Plc completed the acquisition of the Nigerian Agip Oil Company (NAOC) from Italian energy giant Eni in a deal worth $783 million.
- The acquisition was part of another divestment in the oil and gas industry as Eni quits onshore operations in Nigeria for offshore operations.
Speaking on NAOC’s acquisition, the Group Chief Executive of Oando PLC, Wale Tinubu, said:
“Today’s announcement is the culmination of ten years of hard work, resilience, and an unwavering belief that we would realise our ambition. It is a win, not just for Oando, but for every indigenous energy player as we take our destiny in our hands.
“This is a new dawn for the Nigerian energy sector, and we are confident that indigenous companies will play a pivotal role in this next phase of the nation’s upstream evolution. With our assumption of the role of operator, our immediate focus is on optimizing the assets’ immense potential in contributing to our strategic objectives, whilst complementing the nation’s plan to boost production outputs.”
Shell FID on Bonga North deep-water project
Nairametrics recently reported the final investment decision (FID) of Shell Nigeria Exploration and Production Company Limited (SNEPCo) on the Bonga North deep-water project, located off Nigeria’s coast.
- The $5 billion offshore investment, in which Shell has a 55% stake, is expected to yield approximately 350 million barrels of crude oil.
- The Bonga North project includes the drilling and completion of 16 wells, modifications to the existing FPSO, and the installation of new subsea infrastructure. This development is expected to maintain oil and gas production at the Bonga facility.
Speaking on the investment decision, Shell’s Integrated Gas and Upstream Director, Zoë Yujnovich, said: “This is another significant investment, which will help us to maintain stable liquids production from our advantaged Upstream portfolio.”
Two Nigerian companies partner with Saipem to secure a contract on the Bongo North project
Weeks after Shell’s FID on the Bongo North project, an Italian multinational oilfield services company in partnership with two Nigerian companies, KOA Oil & Gas and AVEON Offshore, secured a contract valued at approximately $1 billion from SNEPco to work on the oilfield.
According to Saipem, the contract covers the Engineering, Procurement, Construction, and Installation (EPCI) of risers, flowlines, subsea umbilicals, and associated subsea structures.
NNPCL and TotalEnergies make FID on Ubeta oilfield
The Nigerian National Petroleum Company Limited (NNPCL) and Total Energies also announced a Final Investment Decision (FID) on the Ubeta oilfield (OML 58), in a partnership deal valued at $550 million.
Nairametrics reported that this FID involves a commitment of $550 million to extract 900 billion cubic feet of non-associated natural gas from the oil field, situated approximately 85 kilometres from Port Harcourt in Nigeria’s Niger Delta Region.
What you should know
- These partnerships, divestments, and investments shaped the oil and gas landscape in the year 2024 and it is expected that the gains and developments therefrom will impact the industry in the coming year
- President Bola Tinubu has pledged to boost Nigeria’s energy security by improving production and ensuring a conducive climate for private players to thrive.
