SHELL NIGERIA EXPLORATION AND PRODUCTION COMPANY LIMITED (SNEPCo), a subsidiary of Shell, has signed a $510 million agreement with TotalEnergies EP Nigeria Limited to acquire its 12.5% stake in the SNEPCo-operated Oil Mining Lease 118 Production Sharing Contract (OML 118 PSC), located deep offshore Nigeria. The deal upon completion, will increase SNEPCo’s interest in the OML 118 PSC from 55% to 67.5% upon completion.
The OML 118 PSC, held by Nigeria through the Nigerian National Petroleum Company Limited (NNPC Limited ) as per the 1993 PSC agreement (renewed in 2021), is situated 120 kilometers south of the Niger Delta and includes the Bonga field, operational since 2005, and the Bonga North field, where development began in 2024.
SNEPCo operates the lease in partnership with Esso Exploration and Production Nigeria Ltd. (20%), Nigerian Agip Exploration Ltd. (12.5%), and TotalEnergies EP Nigeria Ltd. (12.5%), on behalf of NNPC. Following the transaction, SNEPCo will hold a 67.5% stake, with Esso and Nigerian Agip retaining their 20% and 12.5% stakes, respectively.
The OML 118 PSC, primarily an oil-producing asset, contributed approximately 11,000 barrels of oil equivalent per day (boe/d) to Shell’s company share in 2024. In December 2024, Shell announced a final investment decision on Bonga North, a subsea tie-back project to the existing Bonga Floating Production Storage and Offloading (FPSO) facility. Bonga North holds an estimated recoverable resource volume exceeding 300 million barrels of oil equivalent, with peak production projected at 110,000 barrels of oil per day. First oil from the project is expected by the end of the decade.
This acquisition according to Shell, aligns with its strategy to grow its combined Integrated Gas and Upstream production by 1% annually through 2030 while maintaining liquids production at 1.4 million barrels per day. Meanwhile, TotalEnergies stated that the divestment supports its focus on high-grading its Upstream portfolio, prioritizing assets with low technical costs and reduced emissions to lower its cash breakeven point.
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