NUPRC approves TotalEnergies’ $510m deal with Shell, Agip

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC), has approved $510 million Sales Purchase Agreement (SPA) by TotalEnergies Exploration and Production Nigeria Ltd.

This agreement allows the transfer of TotalEnergies’ 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).

The commission disclosed this on Thursday in a statement by its Head of Media and Strategic Communications, Mr Eniola Akinkuotu.

According to the agreement, TotalEnergies will transfer 10 per cent of its interest to SNEPco at a cost of 408 million dollars, while NAE will pay 102 million dollars for the remaining 2.5 per cent.

Akinkuotu said that pursuant to Section 95 of the Petroleum Industry Act (PIA 202), the commission carried out due diligence on SNEPco to ascertain their 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 a clear evidence that they have access to funding to meet their financial obligations,” he said.

He said TotalEnergies, a committed operator in Nigeria’s vibrant upstream sector, also paid the statutory application fee for the deal.

The spokesman said that SNEPCO and NAE would bear the decommissioning and abandonment liabilities owed by TotalEnergies to the Federal Government of Nigeria, with respect to the divested interest.

He said the divestment was subject to a ministerial consent in line with Sections 95(1), (2), (7), (11) and 12 of the Petroleum Industry Act, 2021.

According to Akinkuotu, the commission expects SNEPco and NAE to pay five per cent and two per cent respectively of the transaction purse on the total value of 510 million dollars as premium on ministerial consent and processing fees.

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