TotalEnergies’ Nigeria’s exit plans hit roadblock as NUPRC revokes $860m asset sale to Chappal

By Obinna Uballa

TotalEnergies’ plan to scale back its presence in Nigeria’s troubled onshore oil sector has hit a major roadblock after the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) revoked approval for the sale of its 10 per cent stake in the Shell Petroleum Development Company (SPDC) joint venture to Chappal Energies.

The $860 million transaction, agreed last year, was a key plank of the French oil major’s divestment strategy aimed at offloading mature and polluting assets in Nigeria, where theft, spills, vandalism and community disputes have long plagued operations, reports said.

TotalEnergies had planned to shift focus to offshore and gas projects, particularly its Nigeria LNG commitments, according to sources.

But the regulator confirmed to Reuters on Monday that the deal had collapsed after both parties failed to meet financial and regulatory obligations tied to the approval.

“The ministerial consent was accompanied by certain financial obligations to the Nigerian people with strict deadlines. However, both parties failed to meet their financial commitments after repeated extensions, forcing the commission to cancel the deal,” NUPRC spokesperson Eniola Akinkuotu told Reuters.

Sources said Mauritius-based Chappal Energies was unable to raise the required $860 million, leaving Total unable to meet associated regulatory fees and liability requirements. The setback leaves TotalEnergies stuck with its SPDC stake at a time when it is seeking to cut debt and streamline operations.

The collapse represents a blow to Chief Executive Patrick Pouyanne’s plan to raise $3.5 billion from asset sales this year to reduce debt, which had surged 89 per cent to $25.9 billion by July, according to the report. Pouyanne had told investors that the Nigerian divestment was one of three deals expected to help lower the company’s debt-to-equity ratio.

It also contrasts with rival Shell, which in March secured approval to sell its 30 per cent stake in SPDC to a consortium of five mostly local firms for up to $2.4 billion. Other majors, including ExxonMobil, Eni and Equinor, have also exited or scaled down onshore operations in Nigeria in recent years.

Chappal, which specialises in acquiring mature and distressed oilfields, had last year completed a $1.2 billion purchase of Equinor’s Nigerian assets with support from Mauritius Commercial Bank and commodities trader Trafigura. But it has not disclosed financial backers for the failed TotalEnergies bid.

With the revocation, Total remains tied to 15 oil-producing licences and three gas assets under SPDC, including fields that supplied 40 per cent of its Nigeria LNG gas volumes in 2023 – prolonging its entanglement in one of the company’s most challenging portfolios, the report said.

SPDC’s other shareholders include the Nigerian National Petroleum Corporation (55 per cent) and Italy’s Eni (5 per cent).