French energy major TotalEnergies announced on May 29 that its subsidiary TotalEnergies EP Nigeria (TEPNG) signed an agreement with Shell Nigeria Exploration and Production Company Ltd (SNEPCo) for the sale of its non-operated 12.5% interest in the Oil Mining Lease (OML) 118 Production Sharing Contract (PSC) for an amount of $510mn.

SNEPCo is the operator under the OML 118 PSC, where water depths exceed 1,000 metres. It currently produces from the Bonga field via the Bonga Floating Production Storage and Offloading (FPSO) vessel and announced the development of the Bonga North field in December 2024.

Completion of the transaction is subject to customary conditions, including regulatory approvals. Upon completion, this transaction increases British major Shell’s interest in the OML 118 PSC from 55% to 67.5%.

“Following our final investment decision on Bonga North last year, this acquisition brings another significant investment in Nigeria deep-water that contributes to sustained liquids production and growth in our Upstream portfolio,” said Peter Costello, Shell’s President, Upstream.

Located deep offshore at 120km south of the Niger Delta in Nigeria, OML118 PSC is operated by SNEPCo (55%), in partnership with Esso Exploration and Production Nigeria (20%), TotalEnergies EP Nigeria (12.5%), and Nigerian Agip Exploration (12.5%).

Production from the OML 118 PSC, which is mainly oil, represents approximately 11,000 barrels of oil equivalent per day (boe/d) in company share in 2024, according to TotalEnergies.

“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,” said Nicolas Terraz, President Exploration & Production at TotalEnergies, in a statement. “In Nigeria, the Company is focusing on its operated gas and offshore oil assets and is currently progressing the development of Ubeta project, designed to sustain gas supply to Nigeria LNG.”

TotalEnergies has been present for more than 60 years in Nigeria, one of the main contributing countries to its hydrocarbon production with 209,000 boe/d produced in 2024. TotalEnergies also operates an extensive distribution network that includes about 540 service stations in the country.

Shell announced in March it had finalised the sale of its Nigerian subsidiary, the Shell Petroleum Development Company of Nigeria (SPDC), more than a year after announcing its divestment, in line with its strategy to exit onshore oil production in the Niger Delta while prioritising deepwater and integrated gas operations. The divestment marks Shell’s complete withdrawal from Nigeria’s onshore oil sector.

Despite exiting the sector via the sale to Renaissance – a consortium of five companies comprising four exploration and production companies based in Nigeria and an international energy group – Shell said it remains committed to offshore developments and liquefied natural gas (LNG) projects, which are integral to its long-term strategy. Nigeria continues to be a key market for the company, particularly through the Bonga field and the Nigeria LNG project.