February 23, 2024

Equinor ASA is exiting Nigeria after over three decades, selling assets that include its stake in the Agbami oil field to Chappal Energies Mauritius Ltd.

Equinor said the divestment of Equinor Nigeria Energy Co. allows the Norwegian majority state-owned energy major to focus on core areas. It did not disclose the value of the transaction.

“Equinor has been present in Nigeria since 1992 and has played a significant role in developing Nigeria’s largest deep-water field, Agbami”, it said in a recent press release, noting the field has produced over one billion barrels of oil since startup 2008.

Equinor holds a 20.21 percent stake in the Niger Delta’s Agbami, which is operated by Chevron Corp. with a 67.3 percent interest. Prime 127 Nigeria Ltd. holds the remaining 12.49 percent.

The world’s biggest oil discovery in 1998, Agbami holds an estimated 900 million barrels of recoverable volumes, according to information from Chevron.

Agbami, which spans 45,000 acres and sits at a water depth of about 4,800 feet, is tied back to a floating production, storage and offloading vessel.

Agbami, 70 miles off the coast of the central Niger Delta region, partly lies in exploration license OML 128, where Equinor is the operator with a 53.85 percent interest.

Equinor also operates exploration license OML 129 with a 53.85 percent share. Three out of four wells drilled here yielded discoveries according to a Wood Mackenzie report October 5, which classified Bilah, Nnwa and Sehki as non-commercial discoveries.

“This transaction realizes value and is in line with Equinor’s strategy to optimize its international oil and gas portfolio and focus on core areas”, Nina Koch, Equinor senior vice-president for Africa operations, said in a statement about the divestment.

Equinor counts around 30 countries as areas of operation, spanning the Americas, Africa, Asia, Europe and Oceania. In Africa it continues to operate in four other nations: Algeria, Angola, Libya and Tanzania.

“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”, Koch added.

While based in Ebene, Mauritius, Chappal operates in Nigeria, focusing on aging assets in the Niger Delta. Chappal calls itself, in a statement on its website, an “energy company that will respond to the demographic changes in Nigeria where a growing population demands more energy that is sourced in a manner that is cleaner, sustainable and sympathetic of the ecosystem”.

Chappal managing director Ufoma Immanuel said of the takeover of Equinor’s Nigeria operations, “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”.

Chappal has not made available any liquidity information.

The transaction is subject to “regulatory and contractual approvals”, Equinor said.

Equinor exited the first three quarters of 2023 with $61.82 billion in current assets, including $14.94 billion in cash and cash equivalents. Equinor’s current liabilities stood at $34.29 billion as of September 30, according to its quarterly report October 27.

It has halved its earlier production guidance, now expecting to log a 1.5 percent year-on-year growth in output for 2023.

Equinor had posted May 4 a three percent projected rise in production for 2023 against 2022, when it averaged 2.04 million barrels of oil equivalent a day in oil and gas equity output, according to its annual report March 23.

To contact the author, email jov.onsat@rigzone.com

About Author