TotalEnergies' subsidiary, TotalEnergies EP Nigeria (TEPNG), has announced a significant agreement to divest its 12.5 percent non-operated interest in the Oil Mining Lease 118 (OML 118) Production Sharing Contract (PSC). The buyer is Shell Nigeria Exploration and Production Company Ltd (SNEPCo), and the transaction is valued at $510 million. The completion of this sale is contingent upon customary conditions, including necessary regulatory approvals, and is anticipated before the end of the year.

OML 118 is a key deep offshore asset located approximately 120 kilometers south of the Niger Delta in Nigeria. It hosts the Bonga field, which commenced production in 2005, and the Bonga North field, for which development activities began in 2024. Production from the OML 118 PSC is predominantly oil, and TotalEnergies' share amounted to roughly 11,000 barrels of oil equivalent per day (boe/d) in 2024.

Prior to this transaction, the OML 118 PSC was operated by SNEPCo, holding a 55% interest. The other partners included Esso Exploration and Production Nigeria (20%), TotalEnergies EP Nigeria (12.5%), and Nigerian Agip Exploration (12.5%). With this acquisition, SNEPCo’s stake in the OML 118 PSC will increase from 55 percent to 67.5 percent, consolidating its position in the asset.

Nicolas Terraz, President of Exploration & Production at TotalEnergies, explained the strategic motivation behind the sale. He stated, \"TotalEnergies continues to actively high-grade its Upstream portfolio, to focus on assets with low technical costs and low emissions, and to lower its cash breakeven.\" Terraz further elaborated that in Nigeria, TotalEnergies is sharpening its focus on its operated gas and offshore oil assets. A key project in this strategy is the ongoing development of the Ubeta project, which is designed to ensure a sustained gas supply to Nigeria LNG.

From Shell's viewpoint, this acquisition represents a significant investment in Nigeria's deepwater sector. Peter Costello, Shell’s Upstream President, described the deal as a \"remarkable investment\" that \"contributes to sustained liquids production and growth in our Upstream portfolio.\" This move aligns with Shell's final investment decision (FID) on the Bonga North deepwater project, announced on December 16 of the previous year, signaling Shell's continued commitment to developing resources in the region.