Commission Approves TotalEnergies’ $510m Deal With Shell, Agip

Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has approved a Sales Purchase Agreement (SPA) by TotalEnergies Exploration and Production Nigeria Limited to assign its entire 12.5 per cent contractor interest in Oil Mining Lease (OML) 118 to Shell Nigeria Exploration and Production Company (SNEPco) and Nigerian Agip Exploration Limited (NAE).

According to the agreement’s details, TotalEnergies will transfer 10 per cent of its interest to SNEPco at a cost of $408, 000,000, while NAE will pay $102,000,000 for the remaining 2.5 per cent.

The NUPRC said on Thursday that pursuant to Section 95 of the Petroleum Industry Act 2021, the Commission carried out due diligence on SNEPco to ascertain its financial capacity and technical competence.

“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.

“Based on the presentations and documents submitted, there is clear evidence that they have access to funding to meet their financial obligations,” the Commission said.

The NUPRC further stated that TotalEnergies, a committed operator in Nigeria’s vibrant upstream sector, had also paid the statutory application fee for the deal.

The Commission noted that SNEPCO and NAE will bear the decommissioning and abandonment liabilities owed by TotalEnergies to the Federal Government of Nigeria concerning the divested interest.

The upstream regulator explained that the divestment is subject to a ministerial consent in line Sections 95(1), (2), (7), (11) and 12 of the Petroleum Industry Act, 2021.

The Commission, therefore, expects SNEPco and NAE to pay five per cent and two per cent, respectively, of the transaction purse, totalling $510,000,000, as a premium on ministerial consent and processing fees.

The assignees are also to give an undertaking in favour of the Commission to bear all the decommissioning and abandonment liabilities and the host community liabilities owed by TotalEnergies.