- Nigerian oil and gas asset sale faces regulatory and financial hurdles, slowing global majors’ exit strategies.
- The failed deal exposes risks in Nigeria’s energy sector and delays TotalEnergies’ efforts to cut debt and pollution.
Nigeria’s oil and gas asset sale has again faced a major setback. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) confirmed that the approval for TotalEnergies’ planned $860 million divestment to Chappal Energies has been withdrawn. The move highlights the financial and regulatory hurdles in Nigeria’s energy sector.
In July 2024, TotalEnergies agreed to sell its 10% stake in Shell Petroleum Development Company of Nigeria Limited (SPDC). Chappal Energies, a Mauritius-based firm, was expected to acquire the stake as part of a wider wave of oil divestments. However, the regulator stated that both parties failed to meet strict financial obligations tied to the approval.
According to NUPRC spokesperson Eniola Akinkuoto, the ministerial consent came with clear deadlines. Despite repeated extensions, the companies failed to meet their commitments. Consequently, the regulator cancelled the deal, leaving Total with its stake in the troubled business.
Sources revealed that Chappal struggled to raise the required $860 million. As a result, TotalEnergies also failed to meet its obligations, which included paying fees and funding environmental rehabilitation. The collapse of this Nigerian oil and gas asset sale underlines the high risks involved in such transactions.
The failed deal leaves TotalEnergies holding assets plagued by theft, sabotage, and operational breakdowns. These challenges have caused frequent spills and costly repairs. Earlier this year, Shell successfully sold its own 30% stake in SPDC to a consortium for $2.4 billion. Other global majors, including ExxonMobil, Eni, and Equinor, have shifted focus away from Nigerian operations.
Chappal Energies had previously secured assets from Equinor for $1.2 billion. Yet this time, it has not disclosed its backers for the proposed TotalEnergies purchase. Meanwhile, TotalEnergies remains tied to 15 oil licences and three gas licences in Nigeria, assets that remain vital to Nigeria LNG supply.
This setback highlights ongoing uncertainties in Nigeria’s oil divestment landscape, raising questions about future deals and investor confidence.