Equinor Makes Big Move, Sells Nigerian Business to Local Firm

Norwegian oil giant Equinor has announced its intention to divest its Nigerian business, which includes its ownership in the Agbami oil field, to Chappal Energies, a Nigerian-owned company. This decision aligns with Equinor’s strategy to optimize its international oil and gas portfolio and concentrate on core areas, as stated by the company’s senior vice president for African operations, Nina Koch.

Equinor has been present in Nigeria since 1992 and has played a pivotal role in the development of the Agbami field, which has yielded over 1 billion barrels of oil since its inception in 2008. The sale to Chappal Energies is anticipated to further enhance these assets and make significant contributions to the Nigerian economy in the future.

The divestment of Equinor’s Nigerian business to a local firm is the most recent in a series of disinvestments by international oil companies (IOCs) in the country. In recent years, there have been multiple similar transactions, including Oando Plc’s agreement to acquire a 100 percent stake in Eni’s subsidiary and Seplat Energy Plc’s acquisition of Mobil Producing Nigeria Unlimited from ExxonMobil for $1.3 billion. However, these agreements are currently pending ministerial consents and other regulatory approvals.

In 2016, Chevron Nigeria Limited also transferred its producing assets in OMLs 53 and 55 to Seplat Petroleum Development Company Plc, marking another substantial divestment by an international oil company in Nigeria.

Equinor’s decision to divest its Nigerian business to Chappal Energies underscores the company’s dedication to optimizing its international portfolio and focusing on its core operating areas. This move also shines a light on the increasing influence of local Nigerian companies in the country’s oil and gas industry and their ambitions to develop and contribute to the economy.

The completion of this transaction is still contingent on regulatory and contractual approvals. Nevertheless, Equinor’s divestment of its Nigerian business to Chappal Energies represents a significant shift in the landscape of the country’s oil and gas industry, with implications for both international and local players in the sector.