TotalEnergies’ Failed Nigerian Onshore Asset Sale Hinders Debt Reduction and Divestment Plans
TotalEnergies’ planned sale of a minority stake in a Nigerian onshore oil producer has collapsed, disrupting its strategy to divest mature, high-cost assets and reduce debt.
In July 2024, the French energy giant agreed to sell its 10% stake in Shell Petroleum Development Company of Nigeria (SPDC) to Mauritius-based Chappal Energies, part of a broader wave of divestments by oil majors from Nigerian onshore assets.
However, the Upstream Petroleum Regulatory Commission of Nigeria announced that it had withdrawn approval for the sale after both parties failed to meet financial obligations required to finalise the deal.
The commission emphasised that ministerial consent was conditional on strict financial commitments to benefit the Nigerian people. Repeated extensions failed to resolve funding shortfalls, leading to the cancellation of the transaction.
Sources familiar with the matter said Chappal Energies was unable to raise the $860 million required, leaving Total unable to pay regulatory fees or allocate funds for environmental rehabilitation and future liabilities.
As a result, Total retains its stake in SPDC — a business long affected by oil spills linked to theft, sabotage, and operational challenges, resulting in costly repairs.
Previously, Shell sold its 30% stake in SPDC to a consortium of mostly local companies for up to $2.4 billion, while ExxonMobil, Eni, and Equinor have divested Nigerian assets to focus on more profitable operations elsewhere.
Chappal Energies, which specialises in distressed and mature upstream assets in the Niger Delta, completed a $1.2 billion acquisition of Nigerian assets from Equinor last year, backed by Mauritius Commercial Bank and Trafigura. However, it has not disclosed its financial backers for the proposed TotalEnergies purchase.
Other SPDC shareholders include the Nigerian National Petroleum Corporation (55%) and Eni (5%).
The failed sale hinders TotalEnergies’ plan to shed high-cost, polluting assets and reduce its $25.9 billion debt, which rose 89% in the year to July.
CEO Patrick Pouyanné had projected that the Nigerian divestment, one of three planned deals, would generate $3.5 billion by year-end and lower Total’s debt-to-equity ratio, which stood at 28% mid-year, including leases and hybrid debt.
The collapse leaves Total with interests in 15 licenses producing around 14,000 barrels of oil equivalent per day in 2023, plus three gas field licenses supplying 40% of Nigeria LNG’s gas output.
