Shell Nigeria Exploration and Production Company (SNEPCo) has signed an agreement to purchase a 12.5 per cent interest in the OML 118 Production Sharing Contract (PSC) from TotalEnergies EP Nigeria Limited.

The deal, once completed, will increase Shell’s stake in the offshore block from 55 per cent to 67.5 per cent.

SNEPCo currently operates the OML 118 PSC, which includes the Bonga field, under a joint venture with Esso Exploration and Production Nigeria Limited (20%), Nigerian Agip Exploration Limited (12.5%), and TotalEnergies EP Nigeria Limited (12.5%). After the transaction closes, the revised ownership structure will exclude TotalEnergies.

Shell confirmed the agreement in a statement released Monday, stating that the transaction remains subject to regulatory approval and other customary conditions. It is expected to be finalised by the end of 2025.

Commenting on the development, Shell’s President of Upstream, Peter Costello, noted the company’s ongoing interest in Nigerian offshore assets.

“This acquisition supports our strategy to maintain production levels and grow our upstream portfolio in deepwater Nigeria,” he said. Costello also referenced Shell’s investment decision on the Bonga North project announced in December 2024.

The Bonga field began production in 2005 and is located over 1,000 meters below sea level. It is developed via the Bonga Floating Production Storage and Offloading (FPSO) vessel.

The field reached one billion barrels of oil produced in 2023. Bonga North, a planned subsea tie-back to the Bonga FPSO, is estimated to hold over 300 million barrels of recoverable oil equivalent. Peak production from Bonga North is projected at 110,000 barrels per day, with first oil expected before 2030.