Chappal Energies, an indigenous energy company, has announced the successful completion of Equinor Nigeria Energy Company (ENEC), marking the conclusion of Equinor’s 32-year operations in Nigeria.
This deal grants Chappal Energies a 53.85 percent ownership stake in Oil Mining Lease (OML) 128, including a unitised 20.21 percent interest in the prolific Agbami oil field operated by Chevron.
The Agbami field is one of Nigeria’s largest deep-water oil fields, which began production in 2008 and has produced over one billion barrels of oil to date, solidifying its importance as one of Nigeria’s most productive offshore assets.
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In addition to the acquisition, Chappal Energies will assume operatorship of OML 129, an asset with considerable potential.
The block includes the Nnwa, Bilah, and Sehki discoveries, with the Nnwa discovery being part of the larger Nnwa-Doro gas field. Nnwa-Doro, a major gas resource, has been stranded for over 20 years despite its vast reserves and strategic importance to Nigeria’s energy goals.
“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.”
Immanuel emphasised the significance of the acquisition in unlocking the potential of world-class assets and contributing to Nigeria’s economic prosperity.
“We are committed to advancing the Nigerian government’s energy initiatives, particularly the Decade of Gas agenda, which aims to maximize the value of the country’s gas resources for economic transformation,” he said.
According to S&P global, should the partners successfully negotiate specific terms for developing the Nnwa-Doro resources or integrate the project under the Petroleum Industry Act (PIA), it could significantly enhance the project’s economics.
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“The application of post-PIA terms, which involve reduced royalties of 5 percent (export) or 2.5 percent (domestic) for gas and gas liquids, improves project’s Net Present Value (NPV) by more than $1.00 billion at a base case gas price scenario of around $3/Mcf, and also reduces the break-even price (BEP) from $7/Mcf to $3/Mcf,” S & P Global said.
Immanuel highlighted the critical role of regulatory and governmental support in fostering impactful investments and enabling indigenous energy companies to thrive.
Rand Merchant Bank, a division of First Rand Bank Limited, acted as the sole financial advisor to Chappal Energies on the transaction.
While the financial terms of the acquisition remain undisclosed, the deal represents a significant step forward in Chappal Energies’ strategy of revitalising aging assets and enhancing operational efficiency.
Experts said this transition creates a unique opportunity for indigenous companies such as Chappal Energies to take on a leading role in the Nigerian oil and gas industry and become key contributors to the country’s energy future.