Chappal acquires TotalEnergies’ stake in SPDC for $860m

Chappal Energies says it has agreed to purchase TotalEnergies EP Nigeria Limited’s stake in Shell Petroleum Development Company (SPDC) joint venture (JV) for $860 million.

According to a statement on Wednesday, Chappal Energies entered into a sale and purchase agreement (SPA) to acquire TotalEnergies’ 10 percent non-operated interest in its onshore and shallow water assets within the SPDC JV in the Niger Delta.

The transaction is expected to be finalised by December 31.

“The acquisition includes a 10% interest in 15 Oil Mining Leases (OMLs) and two main export terminals in Nigeria specifically the Forcados and Bonny Terminals that are part of the Shell Petroleum Development Company Joint Venture (SPDC JV),” Chappal Energies said.

“In this joint venture, the Nigerian National Petroleum Corporation Limited (NNPCL) holds a 55% stake, SPDC operates with a 30% stake, and Nigerian Agip Oil Company (NAOC) has a 5% stake. 

“The transaction will also see Chappal Energies acquire a 10% participating interest in the 3 other OMLs within the SPDC JV which are mainly gas producing (specifically OML 23, OML 28 and OML 77), while TotalEnergies will retain an economic interest in these licenses which currently account for 40% of Nigeria’s LNG gas supply.”

Chappal Energies said it would have rights to the standalone undeveloped oil reserves within the three OMLs.

“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 said.

Ufoma Immanuel, managing director of Chappal Energies, said the acquisition signifies a significant expansion in the Niger Delta, thereby diversifying the company’s Nigeria footprint between the offshore and onshore basins.

“Chappal Energies becomes the first Nigerian company to execute two significant transactions within a 12-month period,” Immanuel said.

“The transaction is poised to bring substantial benefits to stakeholders, including shareholders, employees, local communities, and the national economy.” 

He said the closing of the deal is subject to certain conditions, including all regulatory and contractual approvals.

In November 2023, Equinor agreed to sell its Nigerian business, including the company’s stake in Agbami oil field to Chappal Energies.