Mkpoikana UdomaPort Harcourt — The Nigerian Upstream Petroleum Regulatory Commission, NUPRC, has approved a $510 million Sales Purchase Agreement, SPA, that will see TotalEnergies Exploration and Production Nigeria Limited transfer its entire 12.5 percent contractor interest in Oil Mining Lease, OML 118 to Shell Nigeria Exploration and Production Company, SNEPCo, and Nigerian Agip Exploration Limited, NAE.
According to details released by the Commission, TotalEnergies will assign 10 percent of its interest to SNEPCo for $408 million, while NAE will take up 2.5 percent at a cost of $102 million.
NUPRC explained that pursuant to Section 95 of the Petroleum Industry Act, PIA, 2021, it conducted due diligence to ascertain the technical and financial capacity of the assignees before granting approval.
“SNEPCo and NAE have demonstrated both technical and managerial competence to optimally contribute to the upstream operations (explore, develop and produce) in OML 118. They already maintain a participating interest in the asset,” the Commission said.
The regulator further noted that evidence of adequate funding was provided by the acquiring firms, while TotalEnergies also paid the statutory application fee for the deal.
As part of the transaction, SNEPCo and NAE are expected to bear the decommissioning and abandonment liabilities owed by TotalEnergies to the Federal Government of Nigeria with respect to the divested interest.
“The assignees are also to give an undertaking in favour of the Commission that they will bear all the decommissioning and abandonment liabilities and the host community liabilities owed by TotalEnergies,” the Commission stressed.
However, the divestment remains subject to ministerial consent in line with Sections 95(1), (2), (7), (11) and (12) of the PIA.
In addition, NUPRC stated that both assignees will pay a premium on ministerial consent and processing fees: SNEPCo at 5 percent and NAE at 2 percent of the transaction purse, based on the total $510 million value of the deal.
The development marks another significant restructuring in Nigeria’s upstream sector as international oil companies continue to optimise their portfolios in line with energy transition realities and government reforms under the Petroleum Industry Act.
