French energy giant TotalEnergies is exploring the sale of its minority stake in a major Nigerian onshore oil joint venture, following Shell’s divestment last month, according to CEO Patrick Pouyanne.
The Shell Petroleum Development Company of Nigeria Limited (SPDC), in which TotalEnergies holds a 10% stake, has faced challenges with numerous onshore oil spills due to theft, sabotage, and operational issues, that led to costly repairs and high-profile lawsuits over the years, media sources reported.
- TotalEnergies wants to divest its share of SPDC, and reshape its portfolio.
- TotalEnergies is the most recent international oil company looking to exit Nigeria’s onshore sector after decades of operations.
- TotalEnergies intends to retain its vital Nigerian gas resources.
What Pouyanne said:
“We want to divest our share of SPDC, and we are looking to reshape the portfolio,” Pouyanne said at TotalEnergies’ annual results presentation on Wednesday.
“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.”
Last year, the French energy giant reiterated its commitment to investing in Nigeria by unveiling a $6 billion (5.5 billion euros) investment plan spread across multiple years in the country’s oil and energy sector, with a primary focus on gas and offshore projects.
Nigeria accounts for 8 to 10 per cent of the company’s worldwide total production and over 18 per cent of its global investment.
TotalEnergies is the most recent international oil company looking to exit Nigeria’s onshore sector after decades of operations.
Despite this move, the French group, which achieved a total production of 219,000 barrels of oil equivalent per day in Nigeria in 2023, continues to be a significant operator of offshore fields in the West African country.
Pouyanne said TotalEnergies intends to retain its vital Nigerian gas resources, stressing their significance for the company’s planned expansion in liquefied natural gas development in the coming years. However, any potential sale would necessitate approval from the Nigerian government.
Last month, Shell announced its agreement to sell its 30% stake in SPDC to a consortium of primarily local companies for a sum of up to $2.4 billion.
Since 2021, Shell has actively pursued the sale of its Nigerian oil and gas business. Shell Petroleum Development Company (SPDC) manages a network of pipelines, 263 oil wells, 56 gas wells, six gas plants, two oil export terminals, and a power plant.
The other partners in this joint venture include the state-owned Nigerian National Petroleum Corporation (NNPC) with a 55% stake and Italy’s Eni holding 5%.
ExxonMobil, Eni, and Equinor have also divested assets in Nigeria in recent years to redirect their focus towards newer and more lucrative operations elsewhere.