The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has approved a Sales Purchase Agreement (SPA) by TotalEnergies Exploration and Production Nigeria Limited to divest its entire 12.5% contractor interest in Oil Mining Lease (OML) 118
The agency made this known in a statement on Thursday posted on X (formerly Twitter).
According to the statement, the interest will be transferred to Shell Nigeria Exploration and Production Company (SNEPCo) and Nigerian Agip Exploration Limited (NAE), both existing partners in the asset.
“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,” the Commission said.
The regulator added that the acquiring companies provided clear evidence of access to funding, ensuring they can meet their financial obligations in relation to the asset.
SNEPCO and NAE to assume responsibility for all decommissioning and abandonment liabilities
As part of the deal, NUPRC emphasized that both SNEPCo and NAE will assume responsibility for all decommissioning and abandonment liabilities, as well as host community obligations owed by TotalEnergies to the Federal Government.
The Commission noted that these liabilities are critical in ensuring the long-term sustainability of Nigeria’s oil and gas operations, especially in host communities.
However, the divestment remains subject to ministerial consent as mandated under Sections 95(1), (2), (7), (11), and (12) of the PIA 2021, the NUPRC stated.
Also, in line with regulatory requirements, SNEPCo and NAE are expected to pay 5% and 2% respectively of the total transaction value, amounting to $510 million as a premium on ministerial consent and processing fees.
The assignees will also provide a written undertaking to the Commission affirming their commitment to the liabilities associated with the divested stake.
Earlier in September, under NUPRC’s supervision, NNPCL, in partnership with TotalEnergies and South Atlantic Petroleum (SAPETRO), finalized a new Production Sharing Contract (PSC) for deepwater Petroleum Prospecting Licences (PPLs) 2000 and 2001.