The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has approved a $510 million Sales Purchase Agreement (SPA) by TotalEnergies Exploration and Production Nigeria Ltd.
The agreement allows the transfer of TotalEnergies’ entire 12.5 per cent contractor interest in Oil Mining Lease (OML) 118 to Shell Nigeria Exploration and Production Company (SNEPCo) and Nigerian Agip Exploration Limited (NAE).
The commission disclosed this in a statement on Thursday by its Head of Media and Strategic Communications, Mr. Eniola Akinkuotu.
According to the details, TotalEnergies will transfer 10 per cent of its interest to SNEPCo at a cost of $408 million, while NAE will pay $102 million for the remaining 2.5 per cent.
Akinkuotu said that pursuant to Section 95 of the Petroleum Industry Act (PIA) 2021, the commission carried out due diligence on SNEPCo to ascertain its financial capacity and technical competence.
“SNEPCo and NAE have demonstrated both technical and managerial competence to optimally contribute to the upstream operations—explore, develop and produce—in OML 118. They already maintain a participating interest in the asset.
“Based on the presentations and documents submitted, there is clear evidence that they have access to funding to meet their financial obligations,” he said.
He added that TotalEnergies, a committed operator in Nigeria’s upstream sector, has also paid the statutory application fee for the deal.
Akinkuotu further explained that SNEPCo and NAE would bear the decommissioning and abandonment liabilities owed by TotalEnergies to the Federal Government with respect to the divested interest.
He said the divestment was subject to ministerial consent in line with Sections 95(1), (2), (7), (11) and (12) of the Petroleum Industry Act, 2021.
According to him, the commission expects SNEPCo and NAE to pay five per cent and two per cent respectively of the transaction value of $510 million as premium on ministerial consent and processing fees.
The assignees are also required to give an undertaking in favour of the commission that they will bear all decommissioning, abandonment, and host community liabilities owed by TotalEnergies.
