TotalEnergies to exit Nigerian onshore oil, after Shell, Eni, others did same

Friday, 09 February 2024 04:32

TotalEnergies to exit Nigerian onshore oil, after Shell, Eni, others did same

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French energy giant TotalEnergies is seeking to sell its minority share in a major Nigerian onshore oil joint venture, following Shell's divestment last month, CEO Patrick Pouyanne said.

Shell Petroleum Development Company of Nigeria Limited (SPDC), in which TotalEnergies holds a 10% stake, has struggled with hundreds of onshore oil spills as a result of theft, sabotage and operational issues that led to costly repairs and high-profile lawsuits over the years.

"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."

SPDC operates a network of pipelines, 263 oil wells, 56 gas wells, six gas plants, two oil export terminals and a power plant, according to its website.

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TotalEnergies is the latest international oil company seeking to withdraw from Nigeria's onshore sector after decades of operations. But the French group, which produced a total of 219,000 barrels of oil equivalent per day in 2023 in Nigeria, remains a major operator of offshore fields in the West African country. Earlier this week it announced the start-up of the Akpo West oilfield located 135 kilometres off the coast.

Shell last month announced it had agreed to sell its 30% stake in SPDC to a consortium of five mostly local companies for up to $2.4 billion.

Other partners in the joint venture are the state's Nigerian National Petroleum Corporation (NNPC), which holds 55% and Italy's Eni with 5%.

Exxon Mobil, Eni and Norway's Equinor have all sold assets in Nigeria in recent years to focus on newer, more profitable operations elsewhere.

Pouyanne said TotalEnergies would keep its Nigerian gas resources, which he described as crucial for the company's planned expansion of liquefied natural gas development in coming years.

Any sale would require Nigerian government approval.

Reuters