France Eni Exits Onshore Arena, Go After Deepwater, LNG
Exodus from Nigeria’s onshore arena continues with another oil major selling operated assets to go after deepwater and LNG plays
By Melisa Čavčić, Offshore Energy
Italy’s energy giant Eni has cleared all the regulatory hurdles that stood in the way of selling Nigerian Agip Oil Company Ltd (NAOC), its wholly-owned subsidiary focused on onshore oil and gas exploration and production and power generation in Nigeria. The green light for this sale comes as European oil majors increasingly turn their backs on operated, and sometimes even non-operated, onshore businesses in the country to hone in on offshore oil and gas assets and liquefied natural gas (LNG) opportunities.
Eni inked an agreement with Oando, Nigeria’s indigenous energy solutions provider, in September 2023 for the sale of NAOC, which has interests in four Nigerian onshore blocks – OML 60, 61, 62, 63 – it operates on behalf of NAOC joint venture (JV), consisting of NAOC (operator, 20%), Oando (20%), and NNPC E&P Limited (60%); the Okpai 1 and 2 power plants with a total nameplate capacity of 960 MW, and two onshore exploration leases – OPL 282 and OPL 135 (90% and 48% stakes, respectively) for which it also holds the operator role.
On the other hand, NAOC’s participating interest in the Shell Production Development Company joint venture (SPDC JV) is not part of the divestment and will be retained in Eni’s portfolio. SPDC JV is currently operated by Shell (30%), with TotalEnergies (10%), NAOC (5%), and NNPC (55%) as partners. However, the list of partners in this JV is set to change soon, since TotalEnergies recently made a move to offload interests in SPDC JV seven months after Shell did the same.
Shell disclosed arrangements in January 2024 to divest its interest in SPDC, with a net book value of around $2.8 billion, to Renaissance, a consortium of five companies – ND Western, Aradel Energy, First E&P, Waltersmith, and Petrolin – to turn all its attention to deepwater and integrated gas businesses in the African country.
TotalEnergies’ decision, made on similar grounds, will fetch $860 million and enable the buyer, Chappal Energies, to get the French giant’s 10% participating interest and all its rights and obligations in 15 licenses of SPDC JV, producing mainly oil, which represented approximately 14,000 barrels equivalent per day for its share in 2023.
In addition, Chappal Energies also put the wheels in motion to buy Equinor’s Nigerian business, including a stake in a Chevron-operated oil field, in November 2023, which allows the Norwegian giant to optimize its international oil and gas portfolio and direct attention to core areas.