The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has approved a $510 million divestment by TotalEnergies Exploration and Production Nigeria Limited, paving the way for Shell Nigeria Exploration and Production Company (SNEPCo) and Nigerian Agip Exploration (NAE) to increase their equity in Oil Mining Lease (OML) 118, home of the Bonga deep-water field.
According to details of the Sales Purchase Agreement, TotalEnergies will transfer 10% of its 12.5% contractor interest to SNEPCo for $408 million, while NAE will acquire the remaining 2.5% for $102 million. The transaction raises Shell’s stake in OML 118 to 67.5%, consolidating its position in Nigeria’s offshore operations following its exit from onshore joint ventures earlier this year.
In a statement issued on Thursday, the Commission said it conducted due diligence on the assignees in line with Section 95 of the Petroleum Industry Act (PIA) 2021.
“SNEPCo and NAE have demonstrated both technical and managerial competence to optimally contribute to the upstream operations in OML 118. They already maintain a participating interest in the asset,” the regulator said.
The Commission added that “based on the presentations and documents submitted, there is clear evidence that they have access to funding to meet their financial obligations.” It confirmed that TotalEnergies had also paid the statutory application fee for the divestment.
However, the approval comes with conditions. The Commission stated that Shell and Agip will assume all decommissioning, abandonment, and host community liabilities associated with the divested interest, obligations previously borne by TotalEnergies. Both companies are also required to pay a 7% premium—5% by SNEPCo and 2% by NAE—on the transaction value as ministerial consent and processing fees.
Industry analysts note that the deal underscores Shell’s strategy of deepening its offshore investments while winding down its onshore presence, where frequent litigation, sabotage, and oil spills have hampered operations. The company’s divestment from the Shell Petroleum Development Company (SPDC) joint venture was concluded in March 2025.
Bonga, Nigeria’s first deep-water oilfield, came on stream in 2005 and celebrated its one-billionth barrel in 2023. With a production capacity of up to 225,000 barrels of oil per day and about 150 million standard cubic feet of gas, the field remains a cornerstone of Nigeria’s deep-water output.
Its Production Sharing Contract was renewed for 20 years in 2021, creating room for new investment across its satellite fields.
Despite NUPRC’s approval, the divestment is still subject to ministerial consent under the PIA. “The divestment is subject to a ministerial consent in line with Sections 95(1), (2), (7), (11) and 12 of the Petroleum Industry Act, 2021,” the Commission stressed.
The regulator recently withheld consent for another TotalEnergies deal worth $860 million with Chappal Energies over concerns about unmet financial commitments, highlighting that approvals remain contingent on final ministerial action.
By assuming greater responsibility in OML 118, Shell and Agip inherit not only expanded production rights but also the long-term costs of decommissioning and community obligations, raising questions about how those commitments will weigh on future returns.
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