TotalEnergies EP Nigeria has signed a farmout agreement with Star Deep Water Petroleum Limited, a Chevron subsidiary, to transfer a 40% participating interest in the offshore exploration licenses PPL 2000 and PPL 2001, located in Nigeria's prolific West Delta basin.
The licenses cover approximately 2,000 square kilometers and were awarded to a consortium of TotalEnergies and South Atlantic Petroleum during the 2024 Exploration Round by the Nigerian Upstream Petroleum Regulatory Commission.
Following the transaction, TotalEnergies will retain operatorship and a 40% interest, with Chevron also holding 40% and South Atlantic Petroleum 20%.
Nicola Mavilla, Senior Vice-President of Exploration at TotalEnergies, commented: "After launching our joint venture in U.S. offshore exploration in June, we’re delighted to now expand our collaboration to Nigeria to unlock new resources in the West Delta basin. This new joint venture aims at derisking and developing new opportunities in Nigeria, in line with the objectives of the country."
The transaction is subject to customary closing conditions, including regulatory approvals.
In the oil and gas industry, a farmout transaction (or farm-out agreement) is a contract where the owner of an exploration or production license (the "farmor") assigns all or part of its interest to another party (the "farmee") in exchange for the farmee funding or performing specific exploration or development activities, such as drilling wells. This allows the farmor to share financial and operational risks while retaining a stake, and it is a common mechanism for bringing in partners to high-cost offshore projects like those in Nigeria.
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