TotalEnergies, the French oil giant, has disclosed its intention to sell its minority stake in a significant Nigerian oil joint venture, specifically its portion of the Shell Petroleum Development Company of Nigeria Limited (SPDC). This move is part of the company’s strategy to reconfigure its portfolio to better align with its health, security, and environmental policies, citing the challenges of oil production in the Niger Delta as incompatible with these standards.
Patrick Pouyanne, the CEO of TotalEnergies, during the annual results presentation, emphasized the company’s commitment to divesting from SPDC due to the incompatibility of Niger Delta oil production with the firm’s health, security, and environmental guidelines. However, Pouyanne highlighted that TotalEnergies plans to retain its gas operations in Nigeria, deeming them essential for the company’s future expansion in liquefied natural gas development.
In December 2023, TotalEnergies announced a potential investment of up to $6 billion in Nigeria’s energy sector, focusing on gas production to facilitate a transition to cleaner energy sources while reducing investments in hydrocarbons.
Operating in over 130 countries, TotalEnergies has been a significant player in the Nigerian oil and gas industry’s downstream sector for more than five decades. In May 2022, it initiated the process to sell its stake in the Nigerian joint venture, which includes interests in 13 onshore fields and 3 shallow water fields, collectively producing over 20,000 barrels of oil equivalent per day. The divestment also encompasses infrastructure assets, such as 3,500 km of pipelines linked to two major crude export terminals: Bonny and Forcados. TotalEnergies’ move to sell its onshore assets in favor of deep-water fields follows a similar trend among multinational corporations, including Shell Plc’s Nigerian unit, which recently finalized a deal to offload its onshore business in Nigeria to a consortium of five companies after facing prolonged difficulties in divesting these assets.