TotalEnergies’ exit from Nigeria’s troubled onshore oil sector has hit an unexpected roadblock.
Regulators revoked approval for the company’s planned $860 million sale of its 10% stake in Shell Petroleum Development Company of Nigeria Limited (SPDC) to Mauritius-based Chappal Energies.
Financial Hurdles Block The Deal
The deal, which TotalEnergies struck in July 2024, aimed to be a win-win: the company would offload ageing, high-risk assets, while Chappal sought to expand its footprint in Nigeria’s energy market.
Initially, regulators approved the sale in October.
However, both parties missed critical financial deadlines.
“Both parties failed to meet their financial commitments after repeated extensions, forcing the commission to cancel the deal,” said NUPRC spokesperson Eniola Akinkuoto.
According to Bloomberg, Chappal struggled to raise the necessary funds, which prevented TotalEnergies from fulfilling its obligations, including contributions to an environmental remediation fund.
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Previously, Chappal had acquired Equinor’s Nigerian assets in a $1.2 billion deal, but this time, financing fell short.
TotalEnergies Remains In Nigeria
Consequently, TotalEnergies now retains its SPDC stake, a venture long beset by theft, sabotage, and oil spills.
The failed sale also disrupts the company’s strategy to reduce debt, which aimed to generate $3.5 billion from divestments by the end of 2024.
Nevertheless, TotalEnergies continues operations in Nigeria, managing 15 oil licences that produced around 14,000 barrels per day in 2023 and three gas licences supplying 40% of Nigeria LNG’s feedstock.
Ultimately, the collapse highlights the financial and operational hurdles that foreign investors continue to face in the country’s onshore oil sector.
