By Obas Esiedesa, Abuja
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has approved the Sales and Purchase Agreement (SPA) by which TotalEnergies Exploration and Production Nigeria Limited is divesting its entire 12.5 percent contractor interest in Oil Mining Lease (OML) 118 to Shell Nigeria Exploration and Production Company (SNEPCo) and Nigerian Agip Exploration Limited (NAE).
In a statement on Thursday, NUPRC’s Head of Media and Strategic Communications, Eniola Akinkuotu, explained that under the transaction, TotalEnergies will transfer 10 percent of its interest to SNEPCo for $408 million, while NAE will acquire the remaining 2.5 percent for $102 million.
The Commission noted that, pursuant to Section 95 of the Petroleum Industry Act (PIA) 2021, it conducted due diligence to verify the financial capacity and technical competence of the assignees.
“SNEPCo and NAE have demonstrated both technical and managerial competence to optimally contribute to upstream operations in OML 118. They already maintain a participating interest in the asset. Based on the documents submitted, there is clear evidence that they have access to funding to meet their financial obligations,” the Commission stated.
NUPRC confirmed that TotalEnergies, a longstanding operator in Nigeria’s upstream sector, had fulfilled statutory requirements, including payment of the application fee for the divestment.
It added that SNEPCo and NAE will take over decommissioning and abandonment liabilities, as well as host community obligations, previously owed by TotalEnergies to the Federal Government in respect of the divested interest.
The regulator further clarified that the transaction is still subject to ministerial consent in line with Sections 95(1), (2), (7), (11) and (12) of the PIA 2021. As part of the process, SNEPCo and NAE are expected to pay 5 percent and 2 percent, respectively, of the $510 million transaction value as premium on ministerial consent and processing fees.
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