The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has cancelled the approval for TotalEnergies $860 million asset sale to Chappal Energies.
The NUPRC’s Head of Media and Strategic Communications, Eniola Akinkuotu, told PREMIUM TIMES Wednesday morning that Chappal failed to raise the fund, and as a result TotalEnergies did not fulfil its requirement to pay regulatory fees and cover funds for environmental rehabilitation and future liabilities.
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“The ministerial consent was accompanied by certain financial obligations to the Nigerian people with strict deadlines. However, both parties failed to meet their financial commitments after repeated extensions, forcing the commission to cancel the deal,” Mr Akinkuotu said.
Following the cancellation of the deal, according to Mr Akinkuotu, TotalEnergies will now have the asset to itself.
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The deal
TotalEnergies is a multinational energy company operating in more than 130 countries. For over 50 years, the company has remained a leader in the downstream sector of the Nigerian oil and gas industry.
In May 2022, the company launched a sale of its minority stake in a Nigerian oil joint venture. At the time, the company said it was selling its interest in 13 onshore fields and three 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 two key crude export terminals, Bonny and Forcados.
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In December 2023, the company said it would invest as much as $6 billion in Nigeria in coming years, particularly in gas production, as it plans to cut down investment in hydrocarbons and transition into cleaner energy.
Announcing its plans to sell its minority stake in a major Nigerian oil joint venture in February 2024, the firm said it is looking to reshape its portfolio since producing oil in the Niger Delta is not in line with its health, security and environmental policies.
“We want to divest our share of SPDC, and we are looking to reshape the portfolio.
“Fundamentally it’s because producing this oil in the Niger Delta is not in line with our (Health, Security and Environmental) policies, it’s a real difficulty,” Patrick Pouyanne, TotalEnergies chief executive officer said at the company’s annual results presentation at the time.
In July 2024, Oil major TotalEnergies announced that its Nigerian subsidiary signed a sale and purchase agreement (SPA) with Chappal Energies for the sale of its 10 per cent interest in the Shell Petroleum Development Company (SPDC) Joint Venture licences in Nigeria.
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At the time, the company said the transaction was concluded for a firm consideration of $860 million. It noted that closing of the deal is subject to customary conditions, including regulatory approvals.
Under the agreement signed with Chappal Energies, TotalEnergies said it will sell to Chappal Energies its 10 per cent participating interest and all its rights and obligations in 15 licences of SPDC JV.
“TotalEnergies EP Nigeria will also transfer to Chappal Energies its 10 per cent participating interest in the three other licences of SPDC JV which are producing mainly gas (OML 23, OML 28 and OML 77), while retaining full economic interest in these licences which currently account for 40 per cent of Nigeria LNG gas supply,” the company said.
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