TotalEnergies has announced its intention to divest its minority stake in a significant Nigerian onshore oil joint venture, following in the footsteps of Shell’s recent divestment from the region.
The CEO, Patrick Pouyanne, revealed this decision during a presentation of the company’s financial results. Pouyanne emphasized the company’s aim to restructure its portfolio, citing the challenging landscape of oil production in the Niger Delta region.
“We want to divest our share of SPDC, and we are looking to reshape the portfolio,” Pouyanne stated. “Fundamentally it’s because producing this oil in the Niger Delta is not in line with our [Health, Security, and Environmental] policies, it’s a real difficulty.”
Despite the decision to divest from onshore oil assets, Pouyanne clarified that the company intends to retain its Nigerian gas assets, viewing them as essential for future expansion in liquefied natural gas development.
TotalEnergies’ decision comes in the wake of numerous challenges faced by the Shell Petroleum Development Company of Nigeria Limited (SPDC), in which TotalEnergies holds a 10% interest. SPDC has grappled with onshore oil spills resulting from theft, sabotage, and operational challenges, leading to costly repairs and legal battles.
The move by TotalEnergies mirrors a trend among International Oil Companies (IOCs) seeking to divest from Nigeria’s onshore sector after years of operation. However, the French conglomerate remains a significant player in the country’s offshore fields, as evidenced by the recent announcement of operations commencing at the 14000 bpd Akpo West oilfield situated 135 kilometers off the coast.
Recent years have seen a shift in the Nigerian onshore oil industry, with major international oil companies exiting the space, paving the way for local players to take on operations. Last month, Shell disclosed its agreement to sell its 30% stake in SPDC to a consortium primarily composed of local companies for up to $2.4 billion. Similarly, other international oil companies like ExxonMobil and Norway’s Equinor have divested assets in Nigeria to focus on more lucrative operations elsewhere.
