Shell Acquires Bonga Field Stake Offshore Nigeria From TotalEnergies

Shell plc SHEL, the British oil and gas giant, has entered into an agreement with TotalEnergies SE TTE, the French energy major, for the purchase of the latter’s non-operating interest in the Bonga field in Nigeria. The Bonga field is located within the OLM118 production sharing contract (PSC) offshore Nigeria, around 120 kilometers to the south of the Niger Delta.

OLM118 Production Sharing Contract

Shell Nigeria Exploration and Production Company (“SNEPCo”), a subsidiary of the British energy giant, has agreed to acquire the 12.5% participating interest owned by TotalEnergies EP Nigeria, a subsidiary of TotalEnergies, in the OLM118 PSC. TotalEnergies agreed to the sale of its 12.5% interest for a total of $510 million. Apart from the Bonga field, the OLM118 PSC includes the Bonga North field. The development of the Bonga North field began in 2024.

SNEPCo operates the OLM118 PSC, where it holds a 55% stake, alongside its partners, Esso Exploration and Production Nigeria, with a 20% stake, and TotalEnergies EP Nigeria and Nigerian Agip Exploration, each with a 12.5% interest.

TTE's Portfolio Optimization Efforts

TotalEnergies intends to optimize and upgrade its upstream portfolio by divesting its less competitive assets and focusing on assets with low technical costs and lower emissions. The company will prioritize assets with lower breakeven costs as the production from these assets can be sustained even during periods of low commodity prices. In Nigeria, TTE is currently working on advancing the development of the Ubeta project. This project is aimed at supporting gas supplies to Nigeria LNG.

Shell’s Shift from Onshore Operations in Nigeria

In Nigeria, Shell recently divested its onshore operations to focus on deepwater projects and integrated gas operations. The British energy giant sold off its Nigerian onshore subsidiary, Shell Petroleum Development Company of Nigeria (“SPDC”), to Renaissance. The sale included SPDC’s 30% stake in the SPDC joint venture (JV), now owned by Renaissance.

The SPDC JV was formed with the government-owned Nigerian National Petroleum Corporation (“NNPC”) holding the majority 55% stake, alongside Total Exploration and Production Nigeria, with a 10% stake, and Agip Energy and Natural Resources (Nigeria) Limited holding a 5% stake. Shell’s purchase of TTE’s 12.5% participating interest in the Bonga field aligns with its strategy of focusing on deepwater and offshore operations in Nigeria.

Zacks Rank & Key Picks

Both SHEL and TTE currently carry a Zacks Rank #4 (Sell).

Some better-ranked stocks from the energy sector are Energy Transfer ET and RPC, Inc. RES, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Energy Transfer is a midstream player that owns and operates one of the most diversified portfolios of energy assets in the United States. Boasting a pipeline network extending more than 130,000 miles, its network spans over 44 states. With a presence in all the major U.S. production basins, the company’s outlook seems positive.

RPC generates strong and stable revenues through a diverse range of oilfield services, including pressure pumping, coiled tubing and rental tools. The company is strongly committed to returning value to its shareholders through consistent dividend payments and share buybacks, making it an attractive choice for investors seeking steady returns.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research