Shell Nigeria Exploration and Production Company Ltd (SNEPCo), a subsidiary of energy giant Shell, has acquired a 12.5 percent stake in Nigeria’s Bonga.
The transaction is valued at $510 million and is still subject to customary conditions, including regulatory approvals.
TotalEnergies confirmed the divestment in a statement issued in Paris, noting that its subsidiary, TotalEnergies EP Nigeria (TEPNG), signed a binding agreement with SNEPCo for the sale of its non-operated interest in the Oil Mining Lease (OML) 118 Production Sharing Contract (PSC), which includes the Bonga field.
OML 118, located about 120 kilometres off the coast of the Niger Delta, is a prolific deep offshore block that hosts the Bonga and Bonga North oil fields. Production from the field began in 2005 and continues to be one of Nigeria’s most significant offshore oil assets.
Following the acquisition, SNEPCo’s stake in the OML 118 PSC rises to 67.5 percent, consolidating its position as the lead operator of the asset. The remaining interests are held by Esso Exploration and Production Nigeria Ltd (20%) and Nigerian Agip Exploration Ltd (12.5%).
In 2024, the OML 118 block yielded approximately 11,000 barrels of oil equivalent per day (boe/d) attributable to TotalEnergies’ share, production that will now flow to Shell’s portfolio once the deal is finalised.
TotalEnergies described the move as part of a broader strategy to optimise its upstream portfolio by divesting non-core assets and focusing on low-cost, low-emissions operations.
“TotalEnergies continues to actively high-grade its Upstream portfolio, to focus on assets with low technical costs and low emissions, and to lower its cash breakeven,” said Nicolas Terraz, President of Exploration & Production at TotalEnergies. “In Nigeria, the Company is focusing on its operated gas and offshore oil assets and is currently progressing the development of the Ubeta project, designed to sustain gas supply to Nigeria LNG.”
The Ubeta project, located in Rivers State, is expected to play a critical role in boosting domestic gas availability and ensuring the long-term viability of the Nigeria LNG export business, a key component of the country’s energy economy.
Shell’s bet
Shell’s increased investment in Bonga comes at a time when the multinational has been reshaping its Nigerian portfolio, divesting from onshore oil blocks plagued by security and community issues while doubling down on deepwater and gas-focused assets.
The Bonga North development, represents a new phase of growth for the OML 118 PSC. The expansion project is expected to significantly boost production volumes in the coming years, and Shell’s enlarged stake positions it to capture a larger share of the returns.
Implications for Nigeria
The transaction underscores growing investor confidence in Nigeria’s offshore energy sector, even as the country continues to navigate regulatory reforms and production challenges.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is expected to scrutinise the deal as part of its approval process, which will likely assess both financial and environmental implications.
