The regulatory approval was retracted as the parties did not meet the necessary financial commitments. Credit: HJBC/Shutterstock.com.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has withdrawn its approval for TotalEnergies’ intended sale of a minority stake in a Nigerian onshore oil producer. 

The regulatory decision affects TotalEnergies’ strategy to divest mature assets and reduce debt, reported Reuters. 

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The initial agreement, made in July last year, involved TotalEnergies selling a 10% stake in a joint venture (JV) to Telema Energies Nigeria, owned by Mauritius-based Chappal Energies. 

The JV includes the Nigerian National Petroleum Company and Shell Petroleum Development Company of Nigeria. 

The sale, which encompassed several oil mining leases, was part of TotalEnergies’ broader divestment efforts in Nigeria’s onshore oil sector. 

Regulatory approval, initially granted in October last year, was retracted as the parties involved did not meet the financial commitments necessary to finalise the transaction. 

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The NUPRC stated that Chappal Energies did not complete the deal despite receiving extensions. 

Consequently, the NUPRC withdrew its consent for the transaction. 

Nigerian Upstream Petroleum Regulatory Commission spokesperson Eniola Akinkuoto said: “The ministerial consent was accompanied by certain financial obligations to the Nigerian people with strict deadlines. 

“However, both parties failed to meet their financial commitments after repeated extensions, forcing the commission to cancel the deal.” 

Citing a source familiar with the negotiations, Reuters reported that Chappal was unable to secure the $860m (MRs39.11bn) needed. 

Consequently, Total did not meet its obligations to pay regulatory fees or provide funds for environmental rehabilitation and future liabilities. 

In May this year, TotalEnergies agreed to sell its 12.5% non-operated interest in the OML 118 production sharing contract to Shell Nigeria Exploration and Production Company for $510m (€436.1m).