Nigerian regulator withdraws TotalEnergies’ asset sale approval

Core Viewpoint - The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has retracted its approval for TotalEnergies' sale of a minority stake in a Nigerian onshore oil producer, impacting the company's strategy to divest mature assets and reduce debt [1][2]. Group 1: Regulatory Decision - The NUPRC's decision affects TotalEnergies' divestment strategy in Nigeria's onshore oil sector, which includes selling a 10% stake in a joint venture to Telema Energies Nigeria [1][2]. - The initial approval for the sale was granted in October last year but was withdrawn due to the parties' failure to meet financial commitments necessary to finalize the transaction [2][3]. Group 2: Financial Obligations - Chappal Energies, the buyer, did not complete the deal despite receiving extensions, leading to the withdrawal of consent by the NUPRC [3]. - The NUPRC emphasized that the ministerial consent was contingent on financial obligations to the Nigerian people, which were not met by both parties after repeated extensions [3]. - Chappal Energies was reported to be unable to secure the required $860 million (MRs39.11 billion) for the transaction [3]. Group 3: Impact on TotalEnergies - As a result of the retraction, TotalEnergies failed to meet its obligations to pay regulatory fees and provide funds for environmental rehabilitation and future liabilities [4]. - In a related transaction, TotalEnergies agreed to sell its 12.5% non-operated interest in the OML 118 production sharing contract to Shell Nigeria Exploration and Production Company for $510 million (€436.1 million) [4].