Nigeria’s upstream oil regulator has revoked approval for TotalEnergies’ planned $860 million sale of its 10% stake in Shell Petroleum Development Company of Nigeria Limited (SPDC) to Chappal Energies, dealing a blow to the French energy major’s efforts to divest aging onshore assets and cut debt.
Eniola Akinkuoto, spokesperson for the Nigerian Upstream Petroleum Regulatory Commission, said Tuesday that ministerial consent for the deal, originally granted in October 2024, was withdrawn after both parties failed to meet financial obligations despite multiple deadline extensions.
“The ministerial consent was accompanied by certain financial obligations to the Nigerian people with strict deadlines. However, both parties failed to meet their financial commitments… forcing the commission to cancel the deal,” Akinkuoto said.
A source familiar with the matter told Reuters that Chappal Energies struggled to raise the $860 million required, preventing Total from paying regulatory fees and funding environmental remediation for SPDC’s oilfields.
The collapse of the deal leaves TotalEnergies holding its stake in SPDC, which has been plagued by frequent oil spills from theft, sabotage, and operational challenges. SPDC, which operates Nigeria’s largest onshore oil joint venture, is 55% owned by the Nigerian National Petroleum Corporation (NNPC), with Eni holding 5%.
The failed sale represents a setback for TotalEnergies’ CEO Patrick Pouyanné, who had told investors in July that the divestment was one of three transactions expected to raise $3.5 billion in 2024 to lower the company’s debt-to-equity ratio. Total’s net debt surged 89% to $25.9 billion over the past year.
The development also underscores the growing challenges for international oil majors seeking to exit onshore Nigerian operations, which have been dogged by community disputes, regulatory hurdles, and environmental liabilities.
Shell completed a $2.4 billion sale of its 30% stake in SPDC earlier this year, while ExxonMobil, Eni, and Equinor have sold or scaled back Nigerian holdings to focus on more profitable assets elsewhere.
Source: Reuters
Written By Rodney Mbua
