FRENCH energy conglomerate TotalEnergies) has unveiled plans to offload its minority stake in a significant Nigerian onshore oil joint venture, a move that comes in the wake of Shell’s recent divestment. CEO Patrick Pouyanne made the announcement, shedding light on the company’s strategic shift amid environmental concerns and operational challenges in Nigeria’s volatile Niger Delta region.
TotalEnergies, holding a 10 percent stake in The Shell Petroleum Development Company of Nigeria Limited (SPDC), is taking steps to reshape its portfolio, Pouyanne revealed during the company’s annual results presentation. He emphasised the incongruence of oil production in the Niger Delta with TotalEnergies’ Health, Security, and Environmental (HSE) policies, citing it as a significant hurdle for the company.
SPDC, the joint venture in question, has grappled with numerous onshore oil spills resulting from theft, sabotage, and operational issues over the years, leading to substantial repair costs and legal battles. The company’s infrastructure includes a network of pipelines, 263 oil wells, 56 gas wells, six gas plants, two oil export terminals, and a power plant, as per its official website.
TotalEnergies’ decision marks the latest move by an international oil corporation to withdraw from Nigeria’s onshore sector after years of operation. Despite this, TotalEnergies remains a significant player in Nigeria’s offshore fields, having produced 219,000 barrels of oil equivalent per day in 2023. Just this week, the company announced the commencement of operations at the Akpo West oilfield, located 135 kilometres off the coast.
Last month, Shell revealed its agreement to sell its 30 percent stake in SPDC to a consortium of predominantly local companies for up to $2.4bn. Other partners in the joint venture include the Nigerian National Petroleum Corporation (NNPC) with a 55 percent stake and Italy’s Eni holding 5 percent.
International oil majors, including Exxon Mobil, Eni, and Equinor, have also divested assets in Nigeria in recent years, redirecting their focus toward more lucrative ventures elsewhere.
Pouyanne assured that TotalEnergies would retain its Nigerian gas resources, crucial for the company’s planned expansion of liquefied natural gas (LNG) development in the upcoming years. However, any potential sale of its stake in SPDC would necessitate approval from the Nigerian government.