TotalEnergies sells OML 118 stake to Shell for $510m

TotalEnergies announced on Thursday that its subsidiary, TotalEnergies EP Nigeria (TEPNG), has signed an agreement to sell its 12.5% non-operated interest in the Oil Mining Lease (OML) 118 Production Sharing Contract (PSC) to Shell Nigeria Exploration and Production Company Ltd (SNEPCo) for $510 million. The transaction, subject to customary regulatory approvals, is expected to close before the end of 2025.

OML 118, located 120 kilometers south of the Niger Delta in deep offshore waters, hosts the Bonga field, operational since 2005, and the Bonga North field, which began development in 2024. The PSC is currently operated by SNEPCo (55%), with Esso Exploration and Production Nigeria (20%), TotalEnergies EP Nigeria (12.5%), and Nigerian Agip Exploration (12.5%) as partners. The block produces approximately 11,000 barrels of oil equivalent per day (boe/d) for TotalEnergies in 2024, primarily oil.

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Nicolas Terraz, President of Exploration and Production at TotalEnergies, stated that the sale aligns with the company’s strategy to “high-grade its upstream portfolio” by focusing on low-cost, low-emission assets and lowering its cash breakeven. In Nigeria, TotalEnergies is prioritizing its operated gas and offshore oil assets, notably advancing the Ubeta project to sustain gas supply to Nigeria LNG.

Shell, in a separate statement, confirmed that the acquisition will increase SNEPCo’s stake in OML 118 from 55% to 67.5%. Peter Costello, Shell’s Upstream President, described the deal as a “remarkable investment” that strengthens Nigeria’s deepwater sector and supports sustained liquids production. This follows Shell’s final investment decision (FID) on Bonga North, announced on December 16, 2024, marking a significant step in expanding its upstream portfolio in Nigeria.

The transaction underscores Nigeria’s ongoing appeal as a hub for deepwater oil and gas investments, despite global shifts toward sustainable energy. Both companies remain committed to leveraging their expertise to drive value in the region’s energy sector.