TotalEnergies EP Agrees to Sell 10% Stake in Oil, Gas Assets to Chappal for $860m

Emmanuel Addeh in Abuja

Chappal Energies Wednesday announced the acquisition of TotalEnergies EP Nigeria Limited’s 10 per cent stake in key oil and gas assets for an aggregate consideration of $860 million, subject to contractual and regulatory approvals.

A statement by the company stated that the Sale and Purchase Agreement (SPA) is for TotalEnergies’ non-operated interest in its onshore and shallow water assets within the Shell Petroleum Development Company (SPDC) JV in the Niger Delta. The transaction is expected to close by December 31, 2024.

The acquisition includes a 10 per cent interest in 15 Oil Mining Leases (OMLs) and two main export terminals in Nigeria, specifically the Forcados and Bonny Terminals that are part of the SPDC JV.

The Nigerian National Petroleum Corporation Limited (NNPC) holds a 55 per cent stake, SPDC operates with a 30 per cent stake, and the Nigerian Agip Oil Company (NAOC) has a 5 per cent stake in the JV.

The transaction will also see Chappal Energies acquire a 10 per cent participating interest in the three other OMLs within the SPDC JV which are mainly gas producing, specifically OML 23, OML 28 and OML 77.

However, it will see TotalEnergies retain an economic interest in the licenses which currently account for 40 per cent of Nigeria’s Liquefied Natural Gas (LNG) gas supply. Chappal Energies will have rights to the standalone undeveloped oil reserves within the three OMLs.

“Aggregate consideration for the transaction is $860 million. Financing will be provided by a TotalEnergies company entity and/or any financial institution selected by TotalEnergies, Trafigura and a syndicate of international banks.

“This strategic acquisition increases Chappal Energies’ asset base and adds significant reserves to the company’s balance sheet. The portfolio includes over 40 producing fields with a network of pipelines, flow stations, processing facilities and two major terminals,” the statement added.

Managing Director of Chappal Energies, Ufoma Immanuel, commented thus: “This acquisition marks a significant expansion in the Niger Delta, thereby diversifying our Nigeria footprint between the offshore and onshore basins. Chappal Energies becomes the first Nigerian company to execute two significant transactions within a 12-month period.

“The transaction is poised to bring substantial benefits to stakeholders, including shareholders, employees, local communities, and the national economy. The closing is subject to certain conditions, including all regulatory and contractual approvals.”

Chappal Energies describes itself as an energy company focusing on unlocking latent value in Africa’s oil and gas resources as well as revitalising aging assets with solutions that secure longevity in a socially and environmentally sustainable manner.

It adds that the company will embark on value-harnessing activities, which will include enhancing operational efficiency, produced water management, improved evacuation logistics, gas development, capex optimisation, and infrastructure replacement.