French energy giant TotalEnergies announced on Thursday its decision to sell its 12.5% non-operating interest in Nigeria’s Bonga deepwater oil field to a subsidiary of Shell for a significant sum of $510 million. This strategic divestment, executed through TotalEnergies EP Nigeria, was confirmed in an official statement from the company, signaling a continued reshaping of its global portfolio.
The acquisition will bolster Shell's ownership in the Bonga oil field to a substantial 67.5%. This move underscores Shell's sustained focus on offshore oil production within Nigeria, a striking contrast to its recent withdrawal from onshore operations that have historically been plagued by issues of oil spills and operational complexities. Shell recently finalized the sale of these onshore assets to Renaissance, a consortium of Nigerian energy companies, in a deal valued at up to $2.4 billion.
Nicolas Terraz, President of Exploration & Production at TotalEnergies, articulated the rationale behind the divestment, stating, “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.” He further clarified the company's refined strategy in Nigeria, emphasizing, “In Nigeria, the Company is focusing on its operated gas and offshore oil assets and is currently progressing the development of Ubeta project, designed to sustain gas supply to Nigeria LNG.”
Bonga Field Poised for Significant Expansion
The Bonga field itself is on the cusp of a major expansion, with its stakeholders having already approved a field extension project. This initiative aims to add an impressive 110,000 barrels of oil equivalent per day (boe/d) to its output, with the first oil from this expansion anticipated by the end of the decade, according to Reuters. The field's existing floating production, storage, and offloading (FPSO) vessel boasts a robust total processing capacity of 225,000 barrels per day, indicating the significant potential for increased production.
Peter Costello, Shell’s upstream chief, commented on the acquisition's strategic importance, noting, “This acquisition brings another significant investment in Nigeria deep-water that contributes to sustained liquids production and growth in our Upstream portfolio.”
Beyond Shell's now dominant stake, the Bonga field's ownership structure includes Esso Exploration and Production Nigeria, a subsidiary of Exxon, which holds a 20% interest, and Agip, owned by Oando, controlling the remaining 12.5%. The completion of this transaction between TotalEnergies and Shell is contingent upon regulatory approvals and is projected to be finalized by the close of the year.
TotalEnergies has a long-standing presence in Nigeria, spanning over 60 years, and currently employs more than 1,800 individuals across various business segments. Nigeria remains a significant contributor to TotalEnergies’ global hydrocarbon production, with the country accounting for 209,000 boe/d in 2024.
This divestment marks a strategic recalibration for TotalEnergies, enabling it to sharpen its focus on more carbon-efficient and strategically aligned assets within its global portfolio, while Shell solidifies its position in Nigeria's crucial deepwater sector.