Is there a secret to longevity? This health expert says 1,000% yes
In the era of social media, post-COVID, and with mental health at the forefront, a shift is taking […]
Explainer: Why did TotalEnergies sell its Nigerian oil stake?
TotalEnergies has taken a major step by agreeing to sell Chappal Energies, a Mauritius-based business, its 10% ownership in the Shell Petroleum Development Company of Nigeria Limited (SPDC) for $860 million.
The logo of French oil and gas company TotalEnergies is seen at the company's headquarters skyscraper in the financial and business district of La Defense, near Paris, France September 14, 2023. REUTERS/Gonzalo Fuentes
TotalEnergies has taken a major step by agreeing to sell Chappal Energies, a Mauritius-based business, its 10% ownership in the Shell Petroleum Development Company of Nigeria Limited (SPDC) for $860 million.
This move, according to the report by Business Insider, follows TotalEnergies’ growing concerns over ongoing oil leaks, which are mostly the result of sabotage, oil theft, and operational difficulties in Nigeria.
Transaction Details
Following the transaction’s conclusion, Chappal Energies will take over ownership of TotalEnergies’ holdings in 15 oil-producing licences, which in 2023 produced 14,000 barrels of oil equivalent on average per day.
Furthermore, Chappal Energies is going to purchase three gas licences, which will supply forty percent of TotalEnergies’ Nigeria LNG production. TotalEnergies would continue to produce a portion of the gas and have access to the pipelines and other necessary infrastructure needed to support Nigeria’s LNG activities even after the sale.
Strategic Focus
The company is able to concentrate on the whole gas value chain in Nigeria thanks to this strategic shift, as noted by Guy Maurice, president of exploration and production at TotalEnergies. With the consent of regulatory bodies, the divestment is anticipated to be completed by the end of the current year.
Implications for TotalEnergies
TotalEnergies’ commitment to tackling the problems associated with oil spills and related difficulties is demonstrated by its decision to sell its interest in the Nigerian oil industry. The energy company is making a significant move to reshape its operational focus and priorities within the Nigerian energy environment by transferring its interests to Chappal Energies.
Benefits for Nigeria
Additionally, Nigeria may benefit from this trade. With Chappal Energies involved, the problems of oil theft and sabotage may be approached from new angles and with innovative approaches. Also, the maintenance of infrastructure accessibility and gas production guarantees the stability of Nigeria’s LNG activities, which may even become more effective under new management.
Both companies have undergone a strategic shift with the selling of TotalEnergies’ share to Chappal Energies. Nigeria stands to gain from new operational techniques and continuing stability in LNG production, while TotalEnergies can focus on its integrated gas value chain. The closing of this purchase will be carefully monitored since it could establish a standard for other transactions in the area.
