TotalEnergies Sells Bonga Field Stake: What It Means for Nigeria’s Oil Future

TotalEnergies’ recent sale of its 12.5% stake in Nigeria’s Bonga deepwater field for $510 million raises familiar questions about the future of oil and gas in the region. The transaction, which shifts ownership to Shell and Eni, signals a continued reshaping of the energy landscape. TotalEnergies says this move fits its strategy to streamline its global assets. It’s part of a broader trend.

Shell’s increased stake in the OML 118 Production Sharing Contract (PSC), now at 67.5%, underlines its sustained interest in Nigerian offshore production. The Bonga field, Nigeria’s first deepwater development, remains a crucial asset. It currently relies on a floating production vessel that processes an impressive 225,000 barrels of oil equivalent each day.

The timing is noteworthy. This divestment follows Shell’s high-profile exit from its onshore assets, selling them to Renaissance for a reported $1.3 billion. It’s worth recalling the complications surrounding that earlier sale, particularly the delays in regulatory approval. These delays highlighted the complexities and sometimes frustrating pace of doing business in Nigeria’s oil sector.

The onshore assets, as we know, have been plagued by spills and financial losses. The situation is further complicated by the fact that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) was slow in giving the all-clear, raising questions about transparency and efficiency in regulatory processes. This also brings to light how international oil firms have to make tough calls as the cost of operation rises and returns diminish when compared to other places in the world.

Yet, there’s more to this story than just exits. The Bonga field is slated for a major expansion, projected to add 110,000 barrels of oil equivalent per day. First oil from this expansion is expected by the end of the decade. This expansion indicates ongoing investment in deepwater exploration, despite the global push towards renewable energy.

TotalEnergies insists it remains committed to Nigeria, pointing to its extensive downstream network of over 540 service stations and its continued engagement with local communities. The company emphasizes its long-standing presence in Nigeria, with over six decades of operations and a daily production of 209,000 barrels of oil equivalent in 2024. These are solid facts, but they don’t erase the bigger picture.

So, what does this all mean? One angle is about risk appetite. Companies might be looking at specific assets and making choices about where they’re willing to invest, considering both financial returns and reputational factors. Shell’s continued focus on deepwater assets, while shedding onshore holdings, may reflect a strategy to concentrate on operations where it perceives greater control and reduced environmental risks.

Another perspective is the evolving role of international oil companies (IOCs) in Nigeria. The sale to Renaissance shows how local players are increasingly stepping into the energy sector. This transition could, potentially, lead to more domestic participation and benefit-sharing within Nigeria’s oil industry.

However, this transition also comes with its own set of challenges. Can local companies effectively manage these complex assets? Will they prioritize sustainable practices and community engagement? It remains to be seen if these local companies have the technical and financial capabilities to maintain production levels and meet environmental standards.

These kinds of deals usually trigger uncertainty. While the official statements always highlight commitment and continued partnership, these divestments often feel like a prelude to further repositioning. Are more sales coming down the line? Will other IOCs follow suit, further reshaping Nigeria’s energy landscape? The answer to those questions will depend a lot on how the country addresses the challenges, and creates opportunities in the oil and gas sector.

The government’s role is equally critical. Creating a stable and predictable regulatory environment will be important in attracting further investment. Transparent policies and efficient approval processes can either attract more investment or drive businesses away.

The sale of TotalEnergies’ Bonga stake is more than just a financial transaction. It’s a symbol of the evolving dynamics within Nigeria’s oil industry. While some international players streamline their portfolios, others double down on deepwater opportunities. Meanwhile, local companies are gaining ground, promising a new era for Nigerian energy. The ultimate outcome will depend on strategic decisions made by these companies, as well as the actions and policies of the government. The industry will continue to change as stakeholders react to what their competition is doing.

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Keywords: TotalEnergies Bonga field sale, Nigeria oil future, Shell Nigeria deepwater, OML 118 Production Sharing Contract, Nigerian Upstream Petroleum Regulatory Commission, Nigeria oil divestment, Nigeria energy landscape, Bonga field expansion