Chappal acquires 10% interests in Total's Nigeria assets

Chappal Energies has announced that it has entered into a sale and purchase agreement (SPA) to acquire TotalEnergies EP Nigeria Limited's 10% non-operated interest in its onshore and shallow water assets within the SPDC JV in the Niger Delta

The transaction is expected to close by 31 December.

The acquisition includes a 10% interest in 15 oil mining leases (OMLs) and two main export terminals in Nigeria specifically the Forcados and Bonny Terminals that are part of the Shell Petroleum Development Company Joint-Venture (SPDC JV). In this joint-Venture, the Nigerian National Petroleum Corporation Limited (NNPCL) holds a 55% stake, SPDC operates with a 30% stake, and Nigerian Agip Oil Company (NAOC) has a 5% stake. The SPDC JV has previously divested assets as well for increased emphasis on the Nigerian Government's national energy agenda in the remaining OMLs. 

Expanding asset base

The transaction will also see Chappal Energies acquire a 10% participating interest in the three other OMLs within the SPDC JV which are mainly gas producing (specifically OML 23, OML 28 and OML 77). Chappal Energies will have rights to the standalone undeveloped oil reserves within these three OMLs. TotalEnergies, on the other hand, will retain an economic interest in these licenses which currently account for 40% of Nigeria’s LNG gas supply. 

The oil major's senior vice-president - Africa, exploration and production, Mike Sangster, had emphasised on the company's solid footprint in Nigeria, while announcing the start of production from the Akpo West Field in February. 

Aggregate consideration for the transaction is US$860mn. Financing will be provided by a TotalEnergies company entity and/or any financial institution selected by TotalEnergies, Trafigura and a syndicate of international banks.

This strategic acquisition increases Chappal Energies' asset base and adds significant reserves to the company’s balance sheet. The portfolio includes more than 40 producing fields with a network of pipelines, flow stations, processing facilities and two major terminals.

The transaction is poised to bring substantial benefits to stakeholders, including shareholders, employees, local communities, and the national economy. The closing is subject to certain conditions, including all regulatory and contractual approvals.