• Monday, May 27, 2024
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Norway’s Equinor to sell 20% stake in Agbami Field to Chappal Energy

Equinor sells 31-year-old Nigerian business to Chappal Energies

Norway’s Equinor ASA, is set to sell its stake in Agbami, one of Nigeria’s largest deep-water oil fields, to Chappal Energy, according to people acquainted with the situation.

A Bloomberg report on Monday revealed that the energy giant is attempting to sell its 20.2 percent stake in the Agbami field, joining other multinational producers like Shell Plc, Exxon Mobil Corporation, and Eni SpA in trying to unload assets in Africa’s largest crude producer.

Equinor began selling its interest in an offshore Nigeria oilfield in January, according to three industry sources, joining other Western energy companies that were leaving the country of West Africa to concentrate on more innovative and lucrative projects.

The Company then employed Standard Chartered Bank to oversee the sale procedure, which had the potential to raise $1 billion.

According to Equinor’s website at the time, through its ownership of a stake in Chevron’s Agbami field, the company was entitled to net production of about 25,000 barrels of oil equivalent per day.

Offshore oil and gas operations in Nigeria are still profitable because of their increased size, improved security, and favourable financial terms provided by the government.

Equinor, which has been operating in Nigeria since 1992, also owns a 53.85 percent share in the exploration licence OML 129, according to its website.

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However, the report revealed that Chappal Energies Mauritius Limited has now emerged as the favoured buyer of Equinor’s interest in the asset, which is operated by Chevron Corporation and produces about 100,000 barrels of oil a day, the people said.

Five companies including Prime Oil & Gas Cooperatief UA, which already has a 12.5 percent share in the Agbami field, submitted binding bids, according to the sources.

Agbami has accounted for about 7 percent of Nigeria’s oil output this year and only the Shell-operated Bonga field currently produces more oil in the country.

A sales agreement has not yet been completed, and Chappal Energies must still raise funds to finance the transaction, according to the sources, who did not specify the acquisition price. Equinor, Chappal Energies, and Prime O&G all declined to comment.

According to a report, Chappal Petroleum unsuccessfully bid for Nigerian shallow-water oil blocks that Exxon agreed to sell to Seplat in February 2022.

Agbami is located 110 kilometres off the Nigerian coast in water depths of 1,500 metres. It had been developed using subsea wells and is the world’s largest floating production, storage and offloading (FPSO) vessel.

The FPSO can store up to 2.2 million barrels of oil and will be on location for more than 20 years. Equinor also operates two exploration licences—OMLs 128 and 129—with a 53.85 percent share in both. Six wells have been drilled in both, with two discoveries made.