By Emeka Ugwuanyi
Total Exploration and Production Nigeria Limited (TEPNL) is set to sell its 12.5 per cent funding stake in a Bonga oil field in Oil Mining Lease (OML) 118, some 120 kilometres (75 miles) off the Niger Delta.
On completion of the deal, the oil giant will receive as much as $750 million, it was gathered.
The sale process is part of Total’s plan to sell $5 billion of assets around the world by 2020 as part of efforts to adjust its Africa portfolio amid expansion.
TEPNL spokesman did not comment on the planned sale. He said he was out of the country.
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A top Ministry of Petroleum Resources official said such sale of funding equity is allowed in the industry.
According to him, the Nigerian National Petroleum Corporation (NNPC) is the 100 per cent holder of the oil field.
He explained that OML 118 is a production sharing contract (PSC) asset, adding that the NNPC is the holder of the licences of oil fields operated under the PSC arrangement on behalf of the Federal Government.
It only hires a contractor to produce such asset; the contractor looks for others to share the risk with because producing a deepwater (deep offshore) field is very capital-intensive.
In the case of OML 118, the official said Shell Nigeria Exploration and Production Company (SNEPCo) is the contractor (operator), with ExxonMobil, Eni and Total sharing the funding.
SNEPco holds 55 per cent; Exxon Mobil holds 20 per cent, Italy’s Eni and TEPNL hold 12.5 per cent.
With Total pulling out from the funding arrangement, it can find another company to inherit the funding stake, the official said.
The official said: “Let me make it clear that Total has no equity stake in the asset. NNPC does not recognise it when it comes to discussion on the project. NNPC only recognises and discusses with SNEPCo and SNEPCo gets back to other co-venturers on any discussion on OML 118.”
Bonga field is Nigeria’s first deepwater project, which started production in 2005. It produced around 225,000 barrels of oil and 150 million standard cubic feet of gas per day at its peak.
Shell and its partners were expected to make an investment decision on Bonga Southwest last year but uncertainty over its fiscal terms with the Nigerian government delayed the process.
Shell in February launched a tender for bids for a 225,000 barrels per day (bpd) floating production, storage and offloading vessel for the new development phase. It has since pushed back the schedule for the bids.
Total, according to reports, is preparing to expand its operations in Africa after agreeing earlier this year to buy Anadarko’s Africa portfolio for $8.8 billion as part of its acquisition by U.S. rival Occidental Corp.
Total in January started production from the Egina oilfield in OML 130 off Nigeria’s coast which is expected to plateau at 200,000 BPD.
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