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TotalEnergies to Divest Onshore Asset in Nigeria

There are all indications that French energy giant TotalEnergies is seeking to sell its minority share in a major Nigerian onshore oil joint venture, CEO Patrick Pouyanne has disclosed and reported by Reuters. This onshore exit chain reaction coming from International Oil Companies operating in Nigeria which has TotalEnergies as the latest element is assumed to be related to insecurity in onshore operation in the region.

The above disclosure coming days after TotalEnergies and its partners have announced the start of production from the Akpo West field on the Petroleum Mining License Two (PML2) in Nigeria. Akpo field is located 135 kilometers off the coast, Akpo West is tied back to the existing Akpo Floating Production Storage and Offloading (FPSO) facility, which started-up in 2009 and produced 124,000 barrels of oil equivalent per day in 2023. By mid-2024, Akpo West will add 14,000 barrels of condensate production per day, to be followed by up to 4 million cubic meters of gas per day by 2028.

Shell has last month announced it had agreed to sell its 30% stake in SPDC to  Renaissance Africa Energy a consortium of five mostly local companies namely ND Western, Aradel Energy, First E&P, Waltersmith and an international energy group Petrolin for up to $2.4 billion.

 The Chairman of Shell Companies in Nigeria (SCIN), Mr. Osagie Okunbor  has  clarified that the planned divestment by Shell Petroleum Development Company (SPDC) would not affect any contract duly entered by the company, while the major projects in the pipeline, especially the gas projects would be developed under SNEPCo.

 He added that the divestment was business realignment and would only affect the shareholding structure of the company, while the operations and staff would remain intact.

The Shell Petroleum Development Company of Nigeria Limited (SPDC), has struggled with hundreds of onshore oil spills across its wells as a result of theft, sabotage and operational issues that led to costly repairs over the years. SPDC operates a network of pipelines, 263 oil wells, 56 gas wells, six gas plants, two oil export terminals and a power plant, according to its website

TotalEnergies holds a 10% stake The Shell Petroleum Development Company of Nigeria Limited (SPDC) onshore asset, “We want to divest our share of SPDC, and we are looking to reshape the portfolio,” Pouyanne said at TotalEnergies’ annual results presentation. “Fundamentally it’s because producing this oil in the Niger delta is not in line with our [Health, Security and Environmental] policies, it’s a real difficulty.”

Just like Shell divestment is exclusive is its gas investment. TotalEnergies according to Pouyanne would equally keep its Nigerian onshore gas asset from the divestment.

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