Strategic Shifts in Nigeria's Oil Sector: Opportunities in Stake Reconfigurations

The recent $510 million stake sale by TotalEnergies in Nigeria's Bonga oilfield to Shell and Agip marks a pivotal moment in the country's evolving energy landscape. This transaction, approved by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) on September 25, 2025, reflects broader industry trends and strategic recalibrations by international oil companies (IOCs) navigating regulatory, environmental, and economic pressures. For investors, the deal offers a lens through which to evaluate Nigeria's potential as a hub for deepwater energy investments while grappling with persistent risks.

TotalEnergies' Strategic Retreat and Portfolio Optimization

TotalEnergies' decision to divest its 12.5% non-operated stake in the Bonga field—split into a 10% stake to Shell for $408 million and a 2.5% stake to Nigerian Agip Exploration (NAE) for $102 million—aligns with its global strategy to prioritize low-cost, low-emission assetsNigeria agrees to TotalEnergies' $510 million stake sale to Shell, …^[1]. As stated by Nicolas Terraz, President of Exploration & Production at TotalEnergies, the move aims to “optimize upstream portfolio returns while accelerating the energy transition”TotalEnergies exits Bonga Oilfield, sells stake to Shell for $510 million^[2]. The Bonga field, located 120 km offshore in the Niger Delta, had contributed approximately 11,000 barrels of oil equivalent per day (boe/d) in 2024Strategy & Outlook Presentation 2024 “More energy, less emissions, more free cash-flow”^[3], but its operational complexity and environmental footprint made it a non-core asset for TotalEnergies' evolving priorities.

This exit is part of a larger $860 million divestment spree by TotalEnergies in Nigeria, including the sale of a stake in the Shell Petroleum Development Company (SPDC) joint ventureRegulatory Risk in African Energy Deals: Implications …^[4]. Such moves underscore a sector-wide shift: IOCs are increasingly offloading onshore assets in favor of offshore projects with clearer regulatory frameworks and lower operational risks. For TotalEnergies, the proceeds from these sales will fund its $5 billion annual investment in low-carbon energy projects, including renewable power generation and LNG infrastructureTotalEnergies : Sustainability & Climate 2025 Progress Report^[5].

Shell's Strategic Expansion and Production Ambitions

Shell's acquisition of a 12.5% stake in the Bonga field elevates its ownership in the Oil Mining Lease (OML) 118 to 67.5%, positioning it as the majority stakeholder in one of Nigeria's most prolific deepwater assetsNigeria agrees to TotalEnergies' $510 million stake sale to Shell, …^[1]. This aligns with Shell's $5 billion investment in the Bonga North development, which aims to achieve peak production of 110,000 barrels per dayShell acquires stake in Nigerian deepwater asset from …^[6]. The deal also complements Shell's broader strategy to increase liquids production by 1% annually through 2030, as outlined in its 2024 strategic outlookStrategy & Outlook Presentation 2024 “More energy, less emissions, more free cash-flow”^[3].

For investors, Shell's deepening commitment to Nigeria signals confidence in the country's regulatory reforms under the 2021 Petroleum Industry Act (PIA). The PIA's emphasis on transparency and fiscal clarity has attracted renewed interest from IOCs, despite lingering concerns over bureaucratic delays and environmental liabilitiesStrategic Deepwater Plays in Nigeria: Evaluating TotalEnergies’ Exit and Shell’s Expansion as a Catalyst for Energy Investors^[7]. Shell's ability to leverage its existing infrastructure in the Niger Delta—such as pipelines and processing facilities—further enhances the economic viability of the Bonga North projectShell acquires stake in Nigerian deepwater asset from …^[6].

Investment Implications and Sector-Wide Trends

The TotalEnergies-Shell transaction highlights three key investment themes in Nigeria's oil sector:

1. Regulatory Uncertainty and Risk Mitigation: While the PIA has streamlined licensing and fiscal terms, regulatory instability remains a challenge. TotalEnergies' previous experience with revoked approvals for its $860 million SPDC stake sale illustrates the risks of dual regulatory roles held by the NUPRCRegulatory Risk in African Energy Deals: Implications …^[4]. Investors must weigh these uncertainties against the potential for long-term gains in deepwater projects.

2. Environmental and Social Governance (ESG) Pressures: The Niger Delta's history of oil spills and community displacement has intensified scrutiny on ESG compliance. TotalEnergies' exit from the Bonga field, while framed as a strategic move, also reflects the sector's growing emphasis on decarbonization. The company's 2025 Sustainability & Climate Progress Report notes a 55% reduction in methane emissions since 2020, exceeding its original 50% targetTotalEnergies : Sustainability & Climate 2025 Progress Report^[5].

3. Geopolitical and Operational Risks: Insurgency and infrastructure challenges in onshore regions continue to deter investment. However, deepwater projects like Bonga North benefit from advanced technology and lower exposure to these risks. The combined $5.6 billion investment by TotalEnergies and Shell in Nigeria's deepwater sector underscores the sector's resilienceTotalEnergies Sells Stake in Nigerian Oil Asset for $860m^[8].

Conclusion: Navigating Opportunities in a Shifting Landscape

Nigeria's oil sector is at a crossroads, with stake reconfigurations like the TotalEnergies-Shell deal signaling a shift toward deepwater and integrated gas projects. For investors, the key lies in balancing the sector's growth potential with its inherent risks. While regulatory reforms and technological advancements are unlocking value, environmental liabilities and geopolitical tensions remain critical hurdles.

As IOCs pivot toward low-emission assets and higher-margin projects, Nigeria's deepwater fields—backed by Shell's strategic investments and TotalEnergies' divestment proceeds—offer a compelling case study in sectoral transformation. However, sustainable success will require not only capital but also collaborative governance and community engagement to address the legacies of past operations.