TotalEnergies’ Strategic Shift: Selling Nigerian Onshore Oil Business After Shell’s Exit
TotalEnergies has announced plans to sell its minority stake in a prominent Nigerian onshore oil joint venture, following Shell’s recent divestment. This strategic decision was announced by the company’s CEO, Patrick Pouyanne, during the presentation of the company’s financial results. Pouyanne emphasized the company’s plan to restructure its portfolio, citing the increasing challenges associated with oil production in the Niger Delta.
NewsReport gathered that, according to Pouyanne, “We want to divest our share of SPDC, and we are looking to reshape the portfolio. 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.” This statement underscores the company’s commitment to aligning its operations with sustainable and ethical practices, reflecting a broader industry trend towards environmental responsibility and social consciousness.
This online information reports that while TotalEnergies is set to divest its onshore oil business, the company has expressed its intention to retain its Nigerian gas assets, recognizing their pivotal role in the company’s future expansion plans, particularly in liquefied natural gas development over the coming years. This decision reflects the company’s strategic focus on sustainable and cleaner energy sources, aligning with global efforts to transition towards greener energy solutions.
The Shell Petroleum Development Company of Nigeria Limited (SPDC), in which TotalEnergies holds a 10% interest, has faced considerable challenges, including onshore oil spills due to theft, sabotage, and operational difficulties. These issues have resulted in costly repairs and protracted legal disputes, highlighting the complex operating environment in the region.
TotalEnergies’ decision to divest from the Nigerian onshore sector aligns with a broader trend observed among international oil companies (IOCs) seeking to reevaluate their presence in the country’s onshore oil industry after years of operation. Despite this shift, TotalEnergies remains a significant player in Nigeria’s offshore fields and recently announced the commencement of operations at the 14000 bpd Akpo West oilfield located 135 kilometers off the coast. This underscores the company’s continued commitment to its offshore assets and its ongoing contributions to the Nigerian energy landscape.
The Nigerian onshore oil industry has witnessed a notable transition with the exit of major international oil companies, paving the way for local players to assume a more prominent role in the sector. Shell’s recent agreement to sell its 30% stake in SPDC to a consortium primarily composed of local companies for a substantial sum of up to $2.4 billion exemplifies this shift. Additionally, other international oil companies, such as ExxonMobil and Norway’s Equinor, have also divested assets in Nigeria in recent years, redirecting their focus towards newer and potentially more lucrative operations elsewhere.
TotalEnergies’ decision to sell its Nigerian onshore oil business represents a strategic realignment in response to evolving industry dynamics and the company’s commitment to sustainable and responsible business practices. This move underscores the growing emphasis on environmental stewardship, social responsibility, and the pursuit of cleaner energy alternatives within the global energy sector. As the company navigates this transition, its continued focus on offshore assets and gas development highlights its enduring commitment to the Nigerian energy landscape and its strategic vision for the future.