Equinor Energies on Wednesday, announced that it had agreed to sell its Nigerian business, including the company’s share in the Agbami oil field, to Nigerian-owned Chappal Energies.
Although Equinor did not reveal the price of the transaction, a statement from the Norwegian group stated that it will sell Equinor Nigeria Energy Company (ENEC), which holds a 53.85 per cent ownership in Oil Mining Lease (OML) 128, including a 20.21 per cent stake in the Agbami field, operated by Chevron.
The firm added that its presence in Nigeria dates back to 1992, explaining that since the oilfield began production in 2008, over 1 billion barrels of crude oil had been produced by the asset.
“Equinor and Chappal Energies have entered into an agreement for the sale of Equinor Nigeria Energy Company (ENEC), which holds a 53.85 per cent ownership in oil and gas lease OML 128, including the unitised 20.21 per cent stake in the Agbami oil field, operated by Chevron.
“Equinor has been present in Nigeria since 1992 and has played a significant role in developing Nigeria’s largest deep-water field, Agbami. Since production started in 2008, the Agbami field has produced more than 1 billion barrels of oil, creating value for the partners and the Nigerian society,” it said.
It noted that Nigeria has been an important part of Equinor’s international portfolio over the past 30 years, explaining that the transaction realises value and is in line with its strategy to optimise its international oil and gas portfolio and focus on core areas.
“Chappal Energies is a committed Nigerian-owned energy company with the ambition to develop the assets further, contributing to the Nigerian economy for years to come,” said Equinor’s Senior Vice President for Africa Operations, Nina Koch.
Managing Director of Chappal Energies, Ufoma Immanuel, in his remarks on the deal, expressed excitement, stressing that the firm intends to focus on value creation, environmental stewardship and community engagement.
”We are excited to take over the baton from Equinor after three decades of enduring legacy. Value creation, environmental stewardship, and community engagement are at the heart of everything we do, and our social and development impact will be the most important measurement of our success.
“We are confident in our ability to make a lasting impact and are committed to fostering sustainable growth and contributing to Nigeria’s economic prosperity now and in the future,” it stated.
However, it said that the closing of the transaction was still subject to the satisfaction of certain conditions, including all regulatory and contractual approvals.
Chappal described itself as a company focusing on unlocking latent value in Nigeria and Africa’s oil and gas resources, revitalising aging assets with solutions that secure longevity, including enhancing operational efficiency.
It focusses on produced water management, improved evacuation logistics, gas development, capex optimisation, and infrastructure replacement.
Equinor, an international energy company, said it is committed to long-term value creation in a low-carbon future, stressing that its purpose is to turn natural resources into energy for people and progress for society.
Equinor’s portfolio of projects encompasses oil and gas, renewables and low-carbon solutions, with an ambition of becoming a net-zero energy company by 2050. Its headquarters is in Stavanger (Norway).
Meanwhile, two of the three consultancy firms hired by the Organisation of Petroleum Exporting Countries (OPEC) to investigate if Nigeria will reach 1.58 million bpd oil output in 2024 as the country is arguing, have said Nigeria is unlikely to reach the target next year.
OPEC and allies such as Russia, known as OPEC+, delayed its latest meeting due to disagreements over the production quotas of African producers including Nigeria and Angola, sources told Reuters.
Nigeria is seeking to have a higher 2024 target verified by OPEC+ at a time when the group is considering cutting output further rather than increasing it.
In June, OPEC+ cut Nigeria’s output target for 2024 to 1.38 million barrels per day from 1.74 million bpd for 2023, reflecting the fact that for years Nigeria had failed to meet its targets.
The group, however, agreed to give Nigeria a 2024 quota of 1.58 million bpd, subject to independent verification that it could really pump that much.
Nigeria is looking to boost output by resurrecting dormant oilfields and pushing more production onshore, and is introducing fresh measures to address security threats.
OPEC+ tasked three independent consultancies namely: IHS, Rystad Energy and Wood Mackenzie – to verify whether Nigeria, as well as Angola and Congo, can reach their targeted 2024 output levels. They will officially report their findings at Thursday’s OPEC+ meeting.
The use of independent assessments comes after past disagreements about countries’ oil output and production capacity, metrics that feature in negotiations to set individual targets.
Figures from two out of the three consultancies indicate that Nigeria’s 2024 crude output is not likely to reach 1.58 million bpd, potentially challenging the country’s push for the higher quota and complicating a wider OPEC+ agreement.
Nigeria currently produces 1.3 million bpd of crude, according to Rystad, which it expects to rise to 1.5 million bpd next year under its base case scenario.
“This is assuming no further major disruptions,” Patricio Valdivieso of Rystad told Reuters.
A source at another of the three consultancies, which declined to be identified, said that although they had raised estimates for Nigerian output, they don’t expect it to hit 1.58 million bpd next year.O PEC+ has not indicated how the lack of verification will affect quota talks.
Nigeria’s governor to OPEC, Gabriel Aduda, told Reuters last week he was comfortable with the findings of the three consultancies.
Underinvestment and unrest in the oil-producing Delta region has squeezed Nigeria’s oil output from around 2 million bpd five years ago, depriving the government of much-needed revenue. OPEC figures put the country’s October crude output close to its 1.38 million bpd 2024 quota.
Nigeria has pegged its production for 1.78 million bpd for next year in its current budget, up from the 1.69 million bpd approved by the National Assembly in 2023.