Norway’s Equinor Divests Nigeria Business

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(Welligence Energy Analytics, 29.Nov.2023) — Equinor has announced the sale of its Nigeria business to Chappal Energies for an undisclosed consideration.

What were the key drivers for buyer and seller, and what does this mean for future M&A in the country?

  • The exit of the Norwegian giant is not a surprise – The divestment of its Nigeria portfolio has been on the cards for some time. The company has been reducing its E&P footprint in the last few years to focus on a select group of core countries. Its Nigeria business was limited in scale compared to the rest of the portfolio, which offers more opportunity for growth.
  • Are additional country exits to be expected? – This cannot be ruled out, and there are some standout candidates like Argentina. But the company has also engaged in acquisitions in core countries, like its purchase of Suncor’s UK portfolio earlier this year. And it recently announced an agreement to evaluate exploration opportunities in Libya with the country’s NOC, as well as signing contracts for exploration acreage in Angola.
  • Chappal Energies makes its debut in the E&P sector – This deal provides the Nigeria independent with its first assets, its first production and immediate cash flow. The company will now be looking to unlock value from its new portfolio, including monetization of the gas resource.
  • Nigeria’s dynamic independents – The country’s boasts a cohort of ambitious domestic E&Ps. It’s a dynamic group that obviously understands the country well and is focused on growth. We anticipate that some larger IOCs will divest, and therefore opportunities will continue to present themselves.

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