TotalEnergies announced a significant move in its Nigerian portfolio, signing an agreement to divest its non-operated 12.5% interest in the OML118 Production Sharing Contract (PSC) to Shell Nigeria Exploration and Production Company Ltd (SNEPCo) for $510 million. This divestment marks a clear shift in TotalEnergies' upstream strategy, as the company increasingly focuses on assets with lower technical costs, reduced emissions, and improved cash breakeven points.

The OML118 PSC, operated by SNEPCo (55%), is a key deep offshore asset located approximately 120 km south of the Niger Delta. It is home to the producing Bonga field, which commenced operations in 2005, and the Bonga North field, currently under development since 2024. Other partners in the OML118 PSC include Esso Exploration and Production Nigeria (20%) and Nigerian Agip Exploration (12.5%). In 2024, TotalEnergies' share of production from OML118, primarily oil, stood at approximately 11,000 barrels of oil equivalent per day (boe/d).

Nicolas Terraz, President Exploration & Production at TotalEnergies, emphasized the rationale behind the divestment: "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." This statement underscores the company's commitment to optimizing its global asset base in line with evolving energy market dynamics and its broader sustainability goals.

For TotalEnergies, the Nigerian landscape remains crucial, albeit with a refined focus. Terraz added, "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.” This indicates a strategic pivot towards maximizing value from its operated assets, particularly in the gas sector, which is vital for domestic energy supply and export. The Ubeta project, aimed at bolstering gas supply to Nigeria LNG, highlights TotalEnergies' commitment to supporting Nigeria's energy infrastructure and its role as a key player in the country's gas industry.

The completion of this transaction is contingent upon customary conditions, including securing the necessary regulatory approvals from Nigerian authorities. Once finalized, this divestment will allow TotalEnergies to reallocate capital and resources towards projects that align more closely with its strategic objectives of cost efficiency and lower carbon intensity.

This move by TotalEnergies is part of a broader trend among international oil companies to streamline their portfolios, shed non-core assets, and concentrate on high-value, lower-carbon opportunities. The sale of its non-operated stake in the Bonga field is a tangible example of TotalEnergies' proactive approach to portfolio management, aiming to enhance its financial resilience and contribute to its energy transition ambitions.