French energy giant, TotalEnergies, has entered into an agreement to sell a 40 per cent participating interest in Nigeria’s offshore oil block OPL257 to South Atlantic Petroleum Limited (SAPETRO), in a move expected to accelerate appraisal and potential development of the Egina South oil field.
The farm-out agreement will pave the way for an appraisal campaign on the portion of the Egina South field located within OPL257, with plans to develop the resource through a tie-back to TotalEnergies’ existing Egina floating production, storage and offloading (FPSO) vessel.
Upon completion of the transaction, TotalEnergies will retain a 50 per cent operated interest in the block, while SAPETRO will hold 40 per cent and Conoil will maintain the remaining 10 per cent stake.
OPL257 is located approximately 150 kilometres offshore Nigeria, adjacent to PPL261, where TotalEnergies and its partners, including SAPETRO, discovered the Egina South field in 2005. The discovery was made under PPL261, in which TotalEnergies holds a 24 per cent interest, while the field extends across both petroleum licences.
The planned appraisal campaign on the OPL257 portion of the field is expected to commence in the coming months. The exercise will help determine the resource potential and technical requirements for a possible development of Egina South through existing offshore infrastructure.
Under the proposed development concept, production from Egina South would be connected to the Egina FPSO, located approximately 30 kilometres from the field. The tie-back arrangement could allow the partners to utilise existing production facilities rather than develop an entirely new standalone offshore installation.
Commenting on the transaction, Mike Sangster, Senior Vice President, Africa Exploration and Production at TotalEnergies, said the agreement would strengthen the company's existing relationship with SAPETRO and support efforts to advance the oil field towards development.
“TotalEnergies is pleased to have SAPETRO as a partner in OPL257 as well as in the adjacent PPL261 block,” Sangster said.
He added that the expanded partnership would facilitate the appraisal programme and potentially accelerate the development of the field if the results prove successful.
“Consolidating our long-term partnership paves the way for a quick appraisal campaign and subsequent development of Egina South in the success case,” he said.
Sangster further noted that the transaction aligns with TotalEnergies' broader investment strategy, which prioritises commercially viable resources that can be developed with relatively low costs and reduced emissions.
“For TotalEnergies, this is consistent with our strategy to develop low-cost, low-emission resources while leveraging existing facilities,” he added.
The proposed transaction, however, remains subject to customary completion conditions, including the receipt of relevant regulatory approvals.
The deal underscores the continued interest of international and indigenous energy companies in Nigeria's offshore petroleum assets, particularly opportunities that can be developed by leveraging existing infrastructure to reduce capital expenditure, shorten project timelines and improve operational efficiency.