Chappal Energies, an emerging player in Nigeria’s energy landscape, has finalized the acquisition of Equinor Nigeria Energy Company (ENEC), concluding Equinor ASA’s 32-year tenure in the country. This landmark deal is a defining moment for Chappal Energies, granting the indigenous firm a 53.85% ownership stake in Oil Mining Lease (OML) 128, including a 20.21% interest in the prolific Agbami oil field, operated by Chevron.
The Agbami oil field, one of Nigeria’s largest deep-water assets, began production in 2008 and has since delivered over one billion barrels of oil. This acquisition solidifies Chappal Energies’ presence in the offshore sector and positions it as a critical contributor to Nigeria’s oil production.
Additionally, Chappal Energies has assumed operatorship of OML 129, a block with untapped potential. This includes the Nnwa, Bilah, and Sehki discoveries, with the Nnwa-Doro gas field as a centerpiece. The Nnwa-Doro resource, despite being stranded for over two decades, holds significant strategic value for Nigeria’s energy ambitions, particularly under the government’s Decade of Gas agenda.
“This is a milestone achievement for us as an indigenous company acquiring a stake in an offshore production sharing contract (PSC) through a competitive process,” said Ufoma Immanuel, Managing Director of Chappal Energies. “This acquisition aligns with our objectives of securing existing production alongside development opportunities.”
Chappal Energies plans to rejuvenate the assets and enhance their operational efficiency, leveraging regulatory frameworks like Nigeria’s Petroleum Industry Act (PIA) to improve project viability. According to S&P Global, adopting post-PIA terms could dramatically boost the Net Present Value (NPV) of gas projects like Nnwa-Doro by over $1 billion and lower the break-even price from $7/Mcf to $3/Mcf.
For Equinor, this transaction concludes its three-decade presence in Nigeria, during which it played a pivotal role in developing the Agbami oil field. The decision to divest its Nigerian assets aligns with the Norwegian company’s strategy to optimize its global portfolio by focusing on core regions.
Rand Merchant Bank, a division of South Africa’s First Rand Bank Limited, served as Chappal Energies’ exclusive financial adviser, highlighting the complexity and significance of the deal, which is valued at up to $1.2 billion.
“This transition marks a unique opportunity for indigenous companies like Chappal Energies to take on leadership roles in Nigeria’s oil and gas industry,” Immanuel added. “We remain committed to advancing energy initiatives that foster economic prosperity and contribute to a sustainable energy future.”
