Chappal Energies acquires Total E&P 10% stake in SPDC

Chappal Energies has entered into a Sale and Purchase Agreement to acquire TotalEnergies Exploration and Production Nigeria Limited’s 10 per cent non-operated interest in its onshore and shallow water assets within the Shell Petroleum Development Company Joint Venture in the Niger Delta.

The PUNCH learnt that the transaction is expected to close by December 31, 2024.

The acquisition includes a 10 per cent interest in 15 Oil Mining Leases and two main export terminals in Nigeria, specifically the Forcados and Bonny Terminals that are part of the Shell Petroleum Development Company Joint Venture.

In the joint venture, Nigerian National Petroleum Company Limited holds a 55 per cent stake, Shell operates a 30 per cent stake, and Nigerian Agip Oil Company has a five per cent stake.

According to a statement by the company, the transaction will also see Chappal Energies acquire a 10 per cent participating interest in the three other OMLs within the SPDC JV, which are mainly gas-producing, specifically OML 23, OML 28 and OML 77.

It added that TotalEnergies would retain an economic interest in those licences, which currently account for 40 per cent of Nigeria’s liquefied natural gas supply.

“Chappal Energies will have rights to the standalone undeveloped oil reserves within these three OMLs,” the statement read.

The aggregate consideration for the transaction was said to be $860m.

“Financing will be provided by a TotalEnergies company entity and/or any financial institution selected by TotalEnergies, Trafigura and a syndicate of international banks.

“This strategic acquisition increases Chappal Energies’ asset base and adds significant reserves to the company’s balance sheet. The portfolio includes over 40 producing fields with a network of pipelines, flow stations, processing facilities and two major terminals,” the company noted.

The Managing Director of Chappal Energies, Ufoma Immanuel, said, “This acquisition marks a significant expansion in the Niger Delta, thereby diversifying our Nigeria footprint between the offshore and onshore basins.”

Immanuel added that the transaction was poised to bring substantial benefits to stakeholders, including shareholders, employees, local communities, and the national economy.

“The closing is subject to certain conditions, including all regulatory and contractual approvals,” he added.

The PUNCH recalls that Shell announced in January that it had reached an agreement to sell its Nigerian onshore subsidiary, the SPDC, to Renaissance, a consortium of five companies comprising four exploration and production companies based in Nigeria and an international energy group.

Total Exploration and Production Nigeria Limited has a 10 per cent stake in the SPDC.