By Oke Peter
Shell Nigeria Exploration and Production Company Ltd (SNEPCo), a subsidiary of global energy major Shell, has acquired a 12.5% interest in Nigeria’s Bonga oil field from TotalEnergies. The $510 million deal strengthens Shell’s presence in the country’s deep offshore oil sector.
The acquisition is still subject to standard conditions, including regulatory approvals.
In an official statement from Paris, TotalEnergies announced the agreement through its Nigerian subsidiary, TotalEnergies EP Nigeria (TEPNG), confirming the sale of its non-operated interest in Oil Mining Lease (OML) 118 Production Sharing Contract (PSC), which includes the Bonga field.
Located around 120 kilometres off Nigeria’s Niger Delta coast, OML 118 encompasses the Bonga and Bonga North oil fields—key offshore assets in the country. Production began in 2005 and continues to be a major contributor to Nigeria’s oil output.
Following the acquisition, SNEPCo’s share in OML 118 rises to 67.5%, further solidifying its role as the lead operator. The remaining stakes are held by Esso Exploration and Production Nigeria Ltd (20%) and Nigerian Agip Exploration Ltd (12.5%).
In 2024, TotalEnergies‘ share of production from OML 118 amounted to about 11,000 barrels of oil equivalent per day (boe/d), output that will now be integrated into Shell’s portfolio once the transaction is completed.
Strategic Realignment by TotalEnergies
TotalEnergies described the sale as part of its broader strategy to streamline its upstream operations by divesting non-core assets and focusing on projects with lower costs and carbon emissions.
“TotalEnergies continues to actively high-grade its Upstream portfolio, focusing on assets with low technical costs and emissions, and aiming to reduce its cash breakeven,” said Nicolas Terraz, President of Exploration & Production at TotalEnergies.
The company will now focus more heavily on its operated offshore oil and gas projects in Nigeria, particularly the development of the Ubeta gas field in Rivers State. The Ubeta project is intended to support long-term gas supply for the Nigeria LNG export business, a key pillar of the national energy sector.
Shell’s strategic shift
Shell’s increased investment in Bonga comes amid its broader strategy of exiting onshore oil blocks, which have faced operational disruptions due to security and community challenges. Instead, Shell is turning its focus toward deepwater and gas projects, which offer greater stability and potential for growth.
The Bonga North development marks the next phase of expansion for OML 118 and is expected to substantially increase production. With a larger stake, Shell stands to benefit more significantly from future output.
Significance for Nigeria
This deal signals renewed investor confidence in Nigeria’s offshore oil and gas sector, despite ongoing regulatory reforms and production hurdles.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) will review the transaction as part of its approval process, assessing financial and environmental aspects before granting final clearance.
