The Nigerian Upstream Petroleum Regulatory Commission has revoked its earlier approval for French oil major TotalEnergies to divest its minority stake in Shell Petroleum Development Company of Nigeria Limited, dealing a setback to the company’s plans to shed aging assets and cut debt.
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A report by Reuters on Tuesday said the rejection is a setback to the French oil major’s strategy to sell mature, polluting assets and pay down debt.
The decision marks another twist in the ongoing wave of divestments by international oil companies seeking to exit onshore operations in Nigeria’s Niger Delta, where security, environmental, and financial challenges have long undermined profitability.
TotalEnergies had in July 2024 announced an agreement to sell its 10 per cent stake in SPDC to Mauritius-based Chappal Energies. The NUPRC granted ministerial consent for the transaction in October 2024, subject to strict financial conditions. However, the deal collapsed after both parties failed to meet key financial obligations, despite multiple deadline extensions.
“The ministerial consent was accompanied by certain financial obligations to the Nigerian people with strict deadlines. However, both parties failed to meet their financial commitments after repeated extensions, forcing the commission to cancel the deal,” NUPRC spokesperson Eniola Akinkuoto confirmed.
Industry sources said Chappal Energies was unable to raise the required $860 million to fund the purchase. Consequently, TotalEnergies also failed to settle regulatory fees and set aside provisions for environmental rehabilitation and future liabilities.
The collapse of the transaction leaves TotalEnergies saddled with its stake in SPDC, a joint venture plagued by repeated oil spills, pipeline sabotage, and theft. These issues have forced costly repairs and heightened environmental liabilities for operators.
SPDC’s other shareholders are the Nigerian National Petroleum Company Limited, which holds 55 per cent, and Italy’s Eni with 5 per cent. For TotalEnergies, the setback frustrates efforts to slim down its portfolio. The company has said it wants to divest older, high-cost, and polluting assets as part of a broader strategy to cut debt, which ballooned 89 per cent to $25.9 billion as of July 2025.
Chief Executive Officer Patrick Pouyanne told investors in July that the Nigerian sale was one of three deals expected to bring in $3.5 billion by year-end, thereby reducing the group’s debt-to-equity ratio, which stood at 28 per cent mid-year, including leases and hybrid debt.
Nigeria has in recent years witnessed a surge of international oil companies offloading their onshore assets to local or regional players. In March 2025, Shell completed the sale of its 30 per cent stake in SPDC to a consortium of mostly indigenous firms for up to $2.4 billion. U.S. giant ExxonMobil, Italy’s Eni, and Norway’s Equinor have also divested Nigerian assets in order to concentrate on more profitable offshore and global operations.
Chappal Energies itself has positioned as a buyer of distressed and mature assets. In 2024, it acquired Equinor’s Nigerian operations for $1.2bn, with financing from Mauritius Commercial Bank and global commodities trader Trafigura. But for the TotalEnergies deal, the company has not disclosed its backers, raising questions about its financial capacity.
The NUPRC’s decision reflects Nigeria’s tougher stance on asset transfers. Regulators have grown increasingly cautious to ensure incoming operators have both the financial and technical ability to meet obligations.
These include cleaning up decades of oil spills, fulfilling host community development commitments under the Petroleum Industry Act, and covering decommissioning costs for aging fields. Analysts say the cancellation sends a clear message that authorities will not permit asset transfers that leave Nigeria with unresolved environmental damage and social liabilities.
Despite the failed exit, TotalEnergies retains significant operations in Nigeria. The company holds interests in 15 oil-producing licences, which yielded about 14,000 barrels of oil-equivalent per day in 2023, as well as three gas field licences that provide 40 per cent of the feedstock for Nigeria LNG.
For now, the company must manage its remaining onshore exposure while navigating a more demanding regulatory climate and stiffening competition from indigenous operators.
Both TotalEnergies and Chappal Energies declined to comment on the failed transaction. The development underscores the complexities of Nigeria’s onshore oil landscape where international majors are eager to exit, local firms are eager to step in, but financial, environmental, and regulatory hurdles continue to stall transitions.
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