The Nigerian Upstream Petroleum Regulatory Commission has approved a $510 million Sales Purchase Agreement by TotalEnergies Exploration and Production Nigeria Ltd.

This agreement enables the transfer of TotalEnergies’ entire 12.5 per cent contractor interest in Oil Mining Lease 118 to Shell Nigeria Exploration and Production Company and Nigerian Agip Exploration Limited.

The commission disclosed this on Thursday in a statement by its spokesperson, Eniola Akinkuotu.

According to the agreement, TotalEnergies will transfer 10 percent of its interest to SNEPCo at a cost of $ 408 million, while NAE will pay $102 million for the remaining 2.5 percent.

Akinkuotu stated that, pursuant to Section 95 of the Petroleum Industry Act (PIA 2021), the commission conducted due diligence on SNEPco to assess its financial capacity and technical competence.

“SNEPco and NAE have demonstrated both technical and managerial competence to optimally contribute to the upstream operations (explore, develop, and produce) in OML 118. They already maintain a participating interest in the asset. Based on the presentations and documents submitted, there is clear evidence that they have access to funding to meet their financial obligations,” he said.

He said TotalEnergies, a committed operator in Nigeria’s vibrant upstream sector, also paid the statutory application fee for the deal.

The spokesman said that SNEPCO and NAE would bear the decommissioning and abandonment liabilities owed by TotalEnergies to the Federal Government of Nigeria, with respect to the divested interest.

He stated that the divestment was subject to ministerial consent, in line with Sections 95(1), (2), (7), (11), and 12 of the Petroleum Industry Act, 2021.

According to Akinkuotu, the commission expects SNEPco and NAE to pay five per cent and two per cent, respectively, of the transaction purse on the total value of $510 million as a premium for ministerial consent and processing fees.

The assignees are also required to provide an undertaking in favour of the commission that they will bear all decommissioning and abandonment liabilities, as well as the host community liabilities owed by TotalEnergies.

(NAN)