TotalEnergies EP Nigeria has agreed to sell a 40 per cent stake in two exploration licenses located offshore Nigeria to Chevron Corp.
This transaction marks the second major collaboration between the two energy giants in six months as they work to unlock hydrocarbon resources in frontier basins.
The French oil major signed a farmout agreement with Star Deep Water Petroleum Limited, a subsidiary of Chevron, covering the PPL 2000 and PPL 2001 exploration licenses in the West Delta basin. This was confirmed in a statement released on Monday. The deal is part of broader discussions between the two companies regarding global exploration opportunities.
Under the terms of the deal, TotalEnergies will retain operatorship and a 40 percent working interest in the blocks. Chevron will hold 40 percent, and South Atlantic Petroleum will maintain its existing 20 percent stake.
This arrangement establishes a balanced partnership between two of the world’s largest international oil companies in an area with a history of significant discoveries.
The licenses cover an area of approximately 2,000 square kilometers within the prolific West Delta basin. They were initially awarded to TotalEnergies and South Atlantic Petroleum following the 2024 exploration round organized by the Nigerian Upstream Petroleum Regulatory Commission. The regulator initiated the licensing round as part of its efforts to attract investment and boost production in Africa’s largest oil producer.
Nicola Mavilla, Senior Vice-President Exploration at TotalEnergies, commented on the deal: “After launching our joint venture in U.S. offshore exploration in June, we’re delighted to now expand our collaboration to Nigeria to unlock new resources in the West Delta basin.” He added, “This new joint venture aims at derisking and developing new opportunities in Nigeria, in line with the objectives of the country.”
The transaction reinforces a growing strategic partnership between TotalEnergies and Chevron in offshore exploration. Just in June, TotalEnergies acquired a 25 percent working interest in a portfolio of exploration leases offshore the United States, comprising 40 Chevron-operated blocks. The rapid expansion of their collaboration to a second continent signals confidence in the partnership model and alignment on their exploration strategy.
For Chevron, the Nigeria deal offers entry into acreage within a proven petroleum system where the company previously had limited exposure. The San Ramon, California-based producer has been seeking to expand its international exploration portfolio while adhering to capital discipline. Nigeria stands out as one of the few African countries where major international oil companies continue to pursue new opportunities, despite security challenges and regulatory uncertainties that have prompted some competitors to divest.
TotalEnergies has maintained a significant presence in Nigeria for decades, operating multiple offshore production assets in the country. The company’s decision to retain operatorship while bringing in Chevron as an equal partner allows it to share the exploration risk while fully leveraging its established operational experience in Nigerian waters.
The West Delta basin has yielded numerous commercial discoveries over the past two decades, with water depths spanning from shallow to ultra-deep. The geological structure is considered prospective for both oil and gas accumulations, although exploration in this area demands substantial capital investment and advanced deepwater drilling capabilities.
South Atlantic Petroleum, the local partner in the consortium, stands to gain from the technical expertise and financial resources that Chevron brings to the partnership. Nigerian regulations encourage partnerships between international oil companies and indigenous firms as part of local content development initiatives.
The completion of the farmout transaction is still subject to customary conditions, including regulatory approvals from Nigerian authorities. The NUPRC typically reviews such transactions to ensure they align with national interests and local content requirements, and this approval process can take several months.
This deal emerges as international oil companies are reassessing their Africa strategies amidst the global energy transition. While some producers have reduced their African footprints, TotalEnergies and Chevron appear committed to pursuing select opportunities where they anticipate competitive returns.
The financial terms of the transaction were not disclosed. Industry analysts suggest the deal likely involves both an upfront consideration and future commitments for exploration drilling and seismic acquisition activities.
