Nigerias decision effectively cancels the $860 million transaction between the French oil major and its local buyer

Nigerian regulators have withdrawn approval for TotalEnergies to sell its minority stake in an onshore oil project over alleged failure of the parties to meet financial commitments required to complete a deal.

The West African country's Upstream Petroleum Regulatory Commission (NUPRC) had given conditional clearance for the $860 million transaction in October. However, Reuters cited spokesperson Eniola Akinkuoto on Tuesday as saying the French oil major and Chappal Energies, the Mauritius-based local buyer, missed strict deadlines tied to financial obligations despite repeated extensions.

The Sale and Purchase Agreement signed in July 2024 involved the transfer of TotalEnergies' 10% share in the Shell Petroleum Development Company of Nigeria (SPDC) joint venture, which also includes the state-owned Nigerian National Petroleum Company (55%), Shell as operator (30%), and Eni's Nigerian unit NAOC (5%). The venture operates 18 licenses in the Niger Delta, a region plagued by oil spills, pipeline sabotage, and legal disputes over environmental pollution.

TotalEnergies had framed the sale as part of its strategy to exit Nigeria's onshore oil sector. In itsannouncementlast year, the company said the divestment would allow it to focus its oil offshore and on gas assets, which supplies 40% of Nigeria LNG's feedstock. It has yet to comment on the cancelation of the regulatory clearance.

Oil multinationals have long been embroiled in controversy in Africa's most populous country, and TotalEnergies, which has operated there for more than six decades, has been criticized by communities and activists over spills and environmental issues.

British energy giant Shell, the operator of the SPDC joint venture, has also faced multiplelawsuitsand compensation claims over oil spills in the Niger Delta. Last year, the company announced plans to sell its onshore assets in Nigeria in a deal worth $2.4 billion. Activists and human rights groups, including Amnesty International, have expressed outrage over the move and urged the Nigerian government not to approve the sale until the oil company addresses environmental damage concerns.

(RT.com)