French oil major TotalEnergies has declared its intention to divest its minority stake in a significant Nigerian oil joint venture, specifically its share of Shell Petroleum Development Company of Nigeria Limited (SPDC).
The decision to exit the Nigerian onshore oil business stems from TotalEnergies’ commitment to reshaping its portfolio in alignment with its health, security, and environmental policies. Patrick Pouyanne, TotalEnergies CEO, emphasized that producing oil in the Niger Delta poses challenges that conflict with the company’s policies.
While TotalEnergies plans to divest from SPDC, it intends to retain its Nigerian gas resources, which are deemed essential for the company’s strategic expansion in liquefied natural gas development in the coming years.
This move comes after TotalEnergies’ announcement in December 2023 of its plans to invest up to $6 billion in Nigeria, particularly focusing on gas production as part of its transition towards cleaner energy solutions, reducing its investments in hydrocarbons.
TotalEnergies, a multinational energy company operating in over 130 countries, has been a key player in Nigeria’s downstream sector for over five decades. In May 2022, the company initiated the sale of its minority stake in a Nigerian oil joint venture, including interests in 13 onshore fields and 3 shallow water fields producing over 20,000 barrels of oil equivalent per day.
The divestment also involves infrastructure assets such as 3,500 km of pipelines connecting to crucial crude export terminals, Bonny and Forcados. This strategic move by TotalEnergies reflects a broader trend in the industry, with multinational companies shifting focus from onshore assets to deep-water fields.
In January, the Nigerian subsidiary of London-based oil giant Shell Plc finalized a deal with a consortium of five companies, signaling its exit from the onshore business in Nigeria after encountering prolonged challenges in divesting these assets.