Shell Nigeria Exploration and Production Company Limited (SNEPCo), a subsidiary of global energy giant Shell, has acquired an additional 12.5 percent stake in Nigeria’s Bonga oil field from TotalEnergies, boosting its ownership of one of the country’s most strategic offshore oil assets.
The acquisition, valued at $510 million, is subject to regulatory approvals and other standard conditions. Once finalised, SNEPCo’s stake in the Oil Mining Lease (OML) 118 Production Sharing Contract (PSC), which includes the Bonga and Bonga North fields, will increase to 67.5 percent. This solidifies Shell’s position as the lead operator of the asset.
TotalEnergies made the announcement in a statement from Paris, confirming that its Nigerian subsidiary, TotalEnergies EP Nigeria (TEPNG), signed a binding agreement with SNEPCo to sell its non-operated interest in OML 118.
OML 118 is located roughly 120 kilometres off the coast of the Niger Delta and hosts the prolific Bonga field, which began production in 2005. The field has since remained one of Nigeria’s most productive deep offshore blocks, contributing significantly to the country’s oil output.
Following the sale, the remaining partners in OML 118 include Esso Exploration and Production Nigeria Limited with 20 percent and Nigerian Agip Exploration Limited with 12.5 percent.
In 2024, TotalEnergies’ share of production from OML 118 stood at approximately 11,000 barrels of oil equivalent per day (boe/d). This volume will now move to Shell’s portfolio, once the deal receives regulatory clearance.
TotalEnergies said the divestment is part of its strategic move to streamline its global upstream operations, shedding non-core assets and focusing on projects with lower costs and reduced carbon emissions.
President of Exploration and Production at TotalEnergies, Nicolas Terraz, explained the rationale behind the sale. “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. In Nigeria, the company is focusing on its operated gas and offshore oil assets and is currently progressing the development of the Ubeta project, designed to sustain gas supply to Nigeria LNG.”
The Ubeta gas project, situated in Rivers State, is central to Nigeria’s long-term liquefied natural gas (LNG) strategy. It is expected to improve domestic gas availability and boost supply to the NLNG plant, a critical revenue earner for the nation.
For Shell, this acquisition signals renewed confidence in Nigeria’s deep offshore oil sector. The company has recently been shifting its focus away from onshore oil operations in Nigeria due to persistent security challenges and community disputes, opting instead to expand its deepwater and gas investments.
The Bonga North development is one of Shell’s next major growth areas. The new phase is projected to increase oil production from the OML 118 block significantly in the coming years, and with a larger stake, Shell will be in a better position to benefit from the expected returns.
Industry analysts view the move as a strong signal of confidence in Nigeria’s offshore oil sector, despite broader concerns in the industry about regulatory risks, sabotage, and crude theft.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is expected to review the deal, with the process likely to consider financial soundness, compliance with environmental standards, and alignment with Nigeria’s broader oil sector reforms.
The divestment also supports Nigeria’s push for more efficient and sustainable energy development, especially as the country seeks to attract new investments into its oil and gas sector while gradually transitioning to cleaner energy sources.
SNEPCo’s expanded stake could help drive new investments and improve production from one of Nigeria’s most strategic assets at a time when the country is struggling to meet OPEC production quotas and stabilise foreign exchange earnings.
Shell’s deeper push into the offshore segment may also serve as a blueprint for other international oil companies currently reviewing their Nigerian portfolios.
