KEY POINTS
- TotalEnergies divests 12.5% stake in OML 118 to Shell and Agip with NUPRC approval.
- Assignees inherit decommissioning, abandonment, and host community obligations tied to the block.
- Deal awaits ministerial consent; Shell and Agip to pay $510 million in fees and premiums.
Nigeria’s upstream regulator has approved the transfer of TotalEnergies’ 12.5% interest in Oil Mining Lease (OML) 118 to two of its long-time partners, Shell Nigeria Exploration and Production Company (SNEPCo) and Nigerian Agip Exploration (NAE).
The move reshapes the ownership structure of one of the country’s most lucrative deepwater assets while spotlighting the government’s insistence on fiscal discipline and community obligations under the Petroleum Industry Act (PIA).
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) said on Thursday that the two companies had demonstrated “technical and managerial competence” to manage the block, which hosts the Bonga field, Nigeria’s first deepwater development.
Liabilities and Host Community Obligations Folded Into Deal
Beyond the transfer of shares, Shell and Agip will inherit TotalEnergies’ obligations to the federal government, including decommissioning and abandonment costs as well as commitments to host communities. NUPRC stressed these liabilities were “critical” to ensuring the long-term sustainability of operations and to avoiding disputes with oil-producing communities.
The deal, however, still requires ministerial consent in line with the PIA. As part of the process, the assignees are to pay a combined $510 million in premiums and processing fees—5% and 2% of the transaction value respectively—to secure the minister’s sign-off. They will also submit written undertakings reaffirming their willingness to shoulder inherited liabilities.
Industry watchers say the divestment continues a trend of international oil companies scaling back certain Nigerian holdings while reinforcing remaining partnerships. For regulators, the transfer is also a chance to enforce the PIA’s emphasis on accountability, especially around environmental and social responsibilities.
