TotalEnergies has sold its minority share in a major Nigerian onshore oil joint venture to Mauritius-based Chappal Energies for $860 million, the French energy group said on Wednesday.

CEO Patrick Pouyanne said in February that TotalEnergies was looking to exit its 10% stake in the Shell Petroleum Development Company of Nigeria Limited (SPDC), which has struggled with hundreds of oil spills as a result of theft, sabotage and operational issues that led to costly repairs and high-profile lawsuits.

Chappal Energies focuses on investments in deep value and distressed brownfield upstream assets in the Niger Delta region.

The sale includes an interest in 15 licences producing mostly oil, with production netting Total 14,000 barrels of oil-equivalent per day in 2023, the company said.

Three additional licences produce mostly gas and currently account for 40% of TotalEnergies' Nigeria LNG gas supply.

Total said it has sold the participation stake in the gas licences to Chappal, but the share of production will stay in Total's portfolio, as well as access to the associated infrastructure and pipelines to supply the Nigeria LNG plant with gas.

"This divestment...allows us to focus our onshore Nigeria presence solely on the integrated gas value chain and is designed to ensure the continuity of feed gas supply to Nigeria LNG in the future," said Nicolas Terraz, president exploration & production, at TotalEnergies.

The transaction is expected to close by year-end, subject to regulatory approvals.

Shell also agreed earlier this year to sell its 30% stake in SPDC to a consortium of five mostly local companies for up to $2.4 billion.

The Nigerian National Petroleum Corporation (NNPC) holds 55% of the joint venture, while Italy's Eni has 5%.

Exxon Mobil, Eni and Norway's Equinor have all sold assets in Nigeria in recent years to focus on newer, more profitable operations elsewhere.

TotalEnergies, which produced a total of 219,000 barrels of oil equivalent per day in 2023 in Nigeria, remains a major operator of offshore fields in the West African country.

Reuters