Norwegian Company Equinor quits Nigeria after 30 years, auctions assets

Norwegian company, Equinor (EQNR.OL), has finalised the sale of its assets in Nigeria and Azerbaijan for a total of up to $2 billion, marking the conclusion of its 30-year operations in both countries.

The Norwegian oil and gas company announced the completion of the divestments on Monday, a move first disclosed in 2023.

The divestments, which were finalised in recent weeks, are expected to enhance Equinor’s cash flow in the fourth quarter. They align with the company’s strategy to optimise its international portfolio.

“The exits enable investments to deepen further in countries where Equinor can add the most value and build a more focused and robust international portfolio,” the company stated, though it did not provide further details.

Equinor aims to increase its international output by 100,000 barrels of oil equivalent per day (boed) by 2030, focusing on new fields in Brazil, the UK, and the US.

In Nigeria, Equinor sold a 20.21% stake in the Agbami oil field, operated by Chevron (CVX.N), to Chappal Energies for up to $1.2 billion, consisting of $710 million in cash and the rest in contingent payments.

The company did not specify how market prices or other factors might influence those contingent payments.

In Azerbaijan, the company sold its 7.27% stake in the Azeri Chirag Gunashli (ACG) field, an 8.71% stake in the Baku-Tbilisi-Ceyhan (BTC) oil pipeline, and a 50% stake in the Karabagh project to Azerbaijan’s SOCAR and India’s ONGC for $745 million.

Equinor’s net production in the first three quarters of 2024 was 24,600 boed in Azerbaijan and 17,700 boed in Nigeria.

Background

Equinor, formerly known as Statoil, has been present in Nigeria since 1992.

The company’s initial involvement in the country was through its participation in the Agbami oil field, which is located in Oil Mining Lease (OML) 128.

The Agbami field is one of Nigeria’s largest deep-water oil fields, with estimated recoverable reserves of over 1.2 billion barrels of oil.

Equinor’s Assets in Nigeria

Equinor’s assets in Nigeria included a 20.21% stake in the Agbami oil field. The field, operated by Chevron, has produced over one billion barrels of oil since its startup in 2008. The Agbami field is a significant contributor to Nigeria’s oil production, with an average daily production of around 240,000 barrels of oil.

Reasons for Equinor’s Exit

Equinor’s exit from Nigeria is part of its strategy to optimize its international portfolio and focus on core areas.

The company plans to increase its international output by approximately 100,000 barrels of oil equivalent per day (boe/d) by 2030 through new fields in Brazil, Britain, and the US.

Impact of Equinor’s Exit

Equinor’s exit from Nigeria is expected to have a minimal impact on the country’s oil production.

The Agbami oil field will continue to be operated by Chevron, and Chappal Energies will take over Equinor’s stake in the field.

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