Yemisi Izuora
Shell Nigeria Exploration and Production Company Ltd (SNEPCo), has sustained investment in Nigeria’s deep offshore oil fields exploration with more asset acquisition.
SNEPCo, a subsidiary Shell, in line with its expansion drive has acquired a 12.5 per cent stake in Nigeria’s Bonga oil field from TotalEnergies valued at $510 million.
The deal however is subject to customary conditions, including regulatory approvals.
TotalEnergies confirmed the divestment in a statement issued in Paris, noting that its subsidiary, TotalEnergies EP Nigeria (TEPNG), signed a binding agreement with SNEPCo for the sale of its non-operated interest in the Oil Mining Lease (OML) 118 Production Sharing Contract (PSC), which includes the Bonga field.
The OML 118, located about 120 kilometres off the coast of the Niger Delta, is a prolific deep offshore block that hosts the Bonga and Bonga North oil fields. Production from the field began in 2005 and continues to be one of Nigeria’s most significant offshore oil assets.
With this new deals SNEPCo’s stake in the OML 118 PSC rises to 67.5 per cent consolidating its position as the lead operator of the asset while the remaining interests are held by Esso Exploration and Production Nigeria Ltd (20%) and Nigerian Agip Exploration Ltd (12.5%).
TotalEnergies described the move as part of a broader strategy to optimise its upstream portfolio by divesting non-core assets and focusing on low-cost, low-emissions operations.
“TotalEnergies continues to actively high-grade its Upstream portfolio, to focus on assets with low technical costs and low emissions, and to lower its cash breakeven,” said Nicolas Terraz, President of Exploration & Production at TotalEnergies. “In Nigeria, the Company is focusing on its operated gas and offshore oil assets and is currently progressing the development of the Ubeta project, designed to sustain gas supply to Nigeria LNG.”
The Ubeta project, located in Rivers State, is expected to play a critical role in boosting domestic gas availability and ensuring the long-term viability of the Nigeria LNG export business, a key component of the country’s energy economy.
Shell’s increased investment in Bonga comes at a time when the multinational has been reshaping its Nigerian portfolio, divesting from onshore oil blocks plagued by security and community issues while doubling down on deepwater and gas-focused assets.
The Bonga North development, represents a new phase of growth for the OML 118 PSC. The expansion project is expected to significantly boost production volumes in the coming years, and Shell’s enlarged stake positions it to capture a larger share of the returns.
The transaction underscores growing investor confidence in Nigeria’s offshore energy sector, even as the country continues to navigate regulatory reforms and production challenges.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is expected to scrutinise the deal as part of its approval process, which will likely assess both financial and environmental implications.
In 2024, the OML 118 block yielded approximately 11,000 barrels of oil equivalent per day (boe/d) attributable to TotalEnergies’ share, production that will now flow to Shell’s portfolio once the deal is finalised.