Shell Nigeria Exploration and Production Company (SNEPCo) has signed a definitive agreement to acquire a 12.5% participating interest in Oil Mining Lease (OML) 118 from TotalEnergies for $150 million, strengthening its position in Nigeria’s offshore deepwater sector.
The agreement, announced this week, will increase Shell’s total interest in OML 118 from 55% to 67.5%, consolidating its majority control over the offshore block that hosts the Bonga oilfield—Nigeria’s first deepwater oil project.
Bonga, which came onstream in 2005, currently has a production capacity of 225,000 barrels per day and remains a critical asset in Nigeria’s oil output profile.
The offshore development is operated by SNEPCo under a production sharing contract with the Nigerian National Petroleum Company Limited (NNPCL).
Commenting on the deal, Peter Costello, Shell’s president for upstream operations, stated, “Following our final investment decision on Bonga North last year, this acquisition brings another significant investment in Nigeria deepwater that contributes to sustained liquids production and growth in our upstream portfolio.”
The transaction comes just months after Shell sanctioned the Bonga North project, a major brownfield expansion expected to yield peak production of 110,000 barrels per day.
The new development will be tied back to the existing Bonga Floating Production Storage and Offloading (FPSO) facility and is estimated to contain over 300 million barrels of oil equivalent.
TotalEnergies’ divestment aligns with its corporate strategy to streamline upstream portfolios and prioritise assets where it has operational control, particularly in gas and strategic offshore positions.
“This transaction is consistent with our strategy to actively manage our portfolio and focus on assets where we can add the most value,” said Nicolas Terraz, President of Exploration & Production at TotalEnergies.
Analysts say the move will allow Shell to optimise production planning and unlock greater value through integrated project delivery as it deepens its commitment to Nigeria’s offshore energy sector.
The acquisition also sends a strong signal of investor confidence in the country’s deepwater fiscal environment despite recent calls for regulatory reforms and growing competition across the Gulf of Guinea.
The deal is subject to regulatory approvals and partner consents. Upon completion, Shell will continue to lead operations in OML 118, while the NNPCL and other partners maintain their existing interests.
The Bonga expansion is one of several strategic offshore initiatives intended to stabilise Nigeria’s oil production amid declining output from mature fields and underinvestment in new exploration.
With declining onshore margins and security concerns, deepwater remains a key frontier for sustained oil revenue and foreign direct investment.
Shell’s latest investment adds to a wave of activity in Nigeria’s energy sector as international oil companies reevaluate asset portfolios, divesting from legacy onshore operations and reinvesting in offshore plays with more scalable returns and lower above-ground risks.
