In a landmark transaction, Chappal Energies, a leading Nigerian-owned energy company, has finalized the acquisition of Equinor Nigeria Energy Company (ENEC) in a deal worth up to $1.2 billion. The acquisition, which closed on December 6, 2024, marks a significant milestone for Nigeria’s upstream oil and gas industry and establishes Chappal Energies as a key player in the sector.
The Details of the Acquisition
The deal includes:
- A 54% stake in Oil Mining Lease (OML) 128, which encompasses the prolific Agbami oil field, one of Nigeria’s largest deep-water assets.
- Operatorship of OML 129, further strengthening Chappal’s offshore portfolio.
The transaction also marks Equinor’s complete exit from Nigeria, ending over 30 years of operations in the country. Equinor, formerly Statoil, has been a prominent player in Nigeria’s upstream oil sector, with the Agbami field producing over 1 billion barrels of oil since operations began in 2008.
Strategic Implications for Chappal Energies
This acquisition signals Chappal Energies’ aggressive strategy to expand its upstream operations. The addition of deep-water assets positions the company to:
- Boost Production: OML 128 and OML 129 significantly enhance Chappal’s output capacity, particularly in high-yield deep-water fields.
- Strengthen Offshore Operations: The Agbami oil field solidifies Chappal’s presence in the offshore segment, competing with other major players in the region.
- Enhance Portfolio Diversity: By acquiring both offshore and onshore assets, Chappal ensures a balanced operational footprint, reducing risk and increasing resilience.
The acquisition was facilitated by Rand Merchant Bank, which served as the exclusive financial advisor to Chappal Energies. Nigerian regulators approved the transaction in November 2024, clearing the way for its completion.
A Changing Landscape in Nigeria’s Oil Sector
The deal is part of a broader trend of international oil majors divesting their Nigerian assets due to strategic shifts and regulatory challenges. Earlier in 2024, Chappal acquired TotalEnergies’ onshore oil and gas licenses for $860 million, cementing its reputation as a major buyer of divested assets.
With Equinor and other international companies exiting Nigeria, local players like Chappal Energies and Seplat Energy are stepping up to fill the void. This acquisition positions Chappal as a rising force in Nigeria’s upstream oil sector, challenging established players and driving local content in the industry.
What This Means for Seplat Energy
While Seplat Energy has historically dominated Nigeria’s upstream oil and gas market, Chappal’s acquisition of high-value assets like the Agbami field introduces new competition. However, Seplat’s focus on gas-to-power initiatives and midstream infrastructure gives it a distinct edge in Nigeria’s energy transition goals.
A Vision for Growth
Speaking on the acquisition, Ufoma Immanuel, Managing Director of Chappal Energies, expressed optimism about the company’s future. “This acquisition is a milestone for Chappal Energies as we strengthen our position in Nigeria’s energy sector. We are committed to operational excellence, environmental stewardship, and creating value for our stakeholders.”
Conclusion
The acquisition of Equinor Nigeria by Chappal Energies is a transformative move that reshapes the competitive landscape of Nigeria’s oil and gas industry. With its expanding portfolio of upstream assets, Chappal is well-positioned to drive growth, create jobs, and contribute to Nigeria’s energy security. As the company consolidates its assets, industry stakeholders will be watching closely to see how Chappal’s bold strategy impacts the sector in the years ahead.
