Norway’s Equinor ASA is in the process of selling its 20.2 percent stake in Nigeria’s Agbami oil field to Chappal Energy. This move follows a trend among multinational producers, including Shell, Exxon Mobil, and Eni, who are divesting assets in Africa’s largest crude producer. Agbami field, operated by Chevron, contributes about 7 percent of Nigeria’s oil output and ranks second only to the Shell-operated Bonga field. A sales agreement with Chappal Energies is pending and is subject to financing.
Key Points:
- Asset Sale: Equinor began the process of selling its interest in an offshore Nigerian oilfield, including its stake in the Agbami field, in January. The company engaged Standard Chartered Bank to oversee the sale, with potential proceeds estimated at $1 billion.
- Preferred Buyer: Chappal Energies Mauritius Limited has emerged as the favored buyer for Equinor’s stake in the Agbami field. Chappal Energies must secure funding for the transaction, and the acquisition price was not disclosed.
- Agbami Field Significance: Agbami field, located 110 kilometers off the Nigerian coast, accounts for around 7 percent of Nigeria’s oil output. It is developed with subsea wells and boasts the world’s largest floating production, storage, and offloading (FPSO) vessel.
- Floating Production Facility: The FPSO has a storage capacity of up to 2.2 million barrels of oil and is expected to be in operation for over two decades.
- Equinor’s Operations in Nigeria: Equinor, which has been active in Nigeria since 1992, also holds a 53.85 percent share in exploration licenses OML 128 and OML 129.
- Sales Agreement Status: While Chappal Energies is the preferred buyer, a formal sales agreement has not yet been finalized.
Analysis: Equinor’s decision to divest its stake in the Agbami field reflects a broader trend of multinational energy companies reevaluating their investments in Nigeria, potentially reallocating resources to more promising ventures. This move could have implications for Nigeria’s oil sector and may shape the landscape of future investments in the region.
