NUPRC approves sale of TotalEnergies’ stake in OML 118 to SNEPCo, Agip

Commission (NUPRC) says it has approved the sale purchase agreement (SPA) of TotalEnergies EP Nigeria Limited to assign its entire 12.5 percent contractor interest in oil mining lease (OML) 118 to Shell Nigeria Exploration and Production Company (SNEPco) and Nigerian Agip Exploration (NAE) Limited.

On May 29, TotalEnergies announced a deal to sell its 12.5 percent interest in the production sharing contract (PSC) asset to SNEPCo for $510 million.

OML118 PSC is operated by SNEPCo (55 percent), in partnership with Esso Exploration and Production Nigeria (20 percent), TotalEnergies (12.5 percent), and Nigerian Agip Exploration (12.5 percent).

The NUPRC, in a statement on Thursday by Eniola Akinkuotu, its spokesperson, said as part of the updated transaction, TotalEnergies will transfer 10 percent of its interest to SNEPco at a cost of $408 million, while NAE will pay $102 million for the remaining 2.5 percent.

Pursuant to section 95 of the Petroleum Industry Act 2021, the commission said it carried out due diligence on SNEPco to ascertain the company’s 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,” the statement said.

“Based on the presentations and documents submitted, there is a clear evidence that they have access to funding to meet their financial obligations.”

The NUPRC said TotalEnergies, a committed operator in Nigeria’s upstream sector, had also paid the statutory application fee for the transaction.

The commission noted that SNEPCO and NAE will bear the decommissioning and abandonment liabilities owed by TotalEnergies to the federal government in relation to the divested interest.

The upstream regulator said the divestment remains subject to a ministerial consent in line with sections 95(1), (2), (7), (11) and 12 of the PIA.

“The commission therefore expects SNEPco and NAE to pay 5% and 2% respectively of the transaction purse on the total value of $510,000,000 as premium on ministerial consent and processing fees,” the statement reads.

The assignees are also expected to provide 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”.

On September 24, the NUPRC withdrew the approval for TotalEnergies EP Nigeria’s $860 million asset sale to Chappal Energies, a Mauritius-based oil and gas exploration company.(The Cable)