Total Exits Stake In OML 118

Yemisi Izuora

French oil major Total is working out plans to sell its 12.5 per cent stake valued at  $750 million in a major deepwater oilfield in Nigeria.

According to Reuters, the sale is part of the company’s plan to to adjust its Africa portfolio amid a broad expansion. The company plans to sell $5 billion of assets around the world by 2020, sources told Reuters.

Oil Mining Lease (OML) 118 is located some 120 kilometres (75 miles) off the Niger Delta.

The block is operated by Royal Dutch Shell, which holds a 55 per cent interest, while Exxon Mobil holds a 20 per cent stake in the block and Italy’s Eni and Total each hold 12.5 per cent.

Investment bank Rothschild is running the sale process for Total, the sources said.

A spokeswoman for Total declined to comment.

Rothschild declined to comment.

OML 118 includes the Bonga field, Nigeria’s first deepwater project which started in 2005 and produced around 225,000 barrels of oil and 150 million standard cubic feet of gas per day at its peak.

Output from the block is planned to grow sharply with the $10 billion development of the Bonga Southwest field which is expected to produce up to 200,000 bpd, roughly 10 per cent of Nigeria’s current oil production.

Nigeria’s vast oil resources have attracted foreign oil companies for decades but changes to the country’s oil revenue laws as well as an unexpected tax levy over the past year could make investments in offshore projects less attractive.

Shell and its partners were expected to make an investment decision on Bonga Southwest last year but uncertainty over its fiscal terms with the Nigerian government have delayed the process.

Shell in February launched a tender for bids for a 225,000 bpd floating production, storage and offloading vessel for the new development phase. It has since pushed back the schedule for the bids.

The sale comes as Total prepares to expand its operations in Africa after agreeing earlier this year to buy Anadarko’s Africa portfolio for $8.8 billion as part of its acquisition by U.S. rival Occidental Corp.

Total in January started production from the Egina oilfield which is expected to plateau at 200,000 bpd of oil.

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