TotalEnergies’ plan to retreat from Nigeria’s onshore oilfields has suffered a setback after regulators revoked approval for its planned $860 million sale of a 10 per cent stake in the Shell Petroleum Development Company (SPDC) joint venture to Chappal Energies, it was gathered.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) told Reuters on Monday that it withdrew its earlier consent because both parties failed to meet strict financial and regulatory conditions attached to the transaction.
“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,” NUPRC spokesperson Eniola Akinkuotu said.
The collapse of the deal undermines TotalEnergies’ plan to offload older, high-risk and polluting assets in Nigeria, where rampant oil theft, spills, sabotage and community disputes have made onshore operations increasingly unviable. The French major had planned to redirect resources towards offshore production and its Nigeria LNG gas business.
Sources familiar with the matter told Reuters that Chappal Energies, the Mauritius-based buyer, failed to raise the $860 million purchase price, leaving Total unable to meet associated obligations such as regulatory fees and provisions for environmental liabilities.
The failure leaves TotalEnergies still tied to 15 oil-producing licences and three gas fields that supplied about 40 per cent of its Nigeria LNG gas in 2023. It also prolongs the company’s exposure to the troubled SPDC joint venture, where Shell sold its 30 per cent stake earlier this year for up to $2.4 billion to a consortium of local firms.
The setback also jeopardises TotalEnergies’ broader deleveraging plans. The company’s debt ballooned 89 per cent to $25.9 billion by July, and Chief Executive Patrick Pouyanne had told investors the Nigerian divestment was one of three asset sales expected to bring in $3.5 billion this year.
While rivals including Shell, ExxonMobil, Eni and Equinor have successfully sold onshore Nigerian assets in recent years, TotalEnergies’ failed exit underscores the difficulties of navigating regulatory hurdles and financing risks in Africa’s largest oil producer.
Chappal Energies, which specialises in acquiring mature oil and gas fields, had successfully purchased Equinor’s Nigerian assets for $1.2 billion last year with backing from Mauritius Commercial Bank and commodities trader Trafigura. It has not disclosed financial support for the abandoned TotalEnergies deal.
SPDC’s other shareholders include the Nigerian National Petroleum Company Limited (55 per cent) and Italy’s Eni (5 per cent).
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