Shell PLC ( SHEL )‘s Shell Nigeria Exploration inked a deal with TotalEnergies SE ( TTE )‘s TotalEnergies EP Nigeria Limited involving SNEPCo acquiring TotalEnergies’ 12.5% interest in the OML 118 Production Sharing Contract (OML 118 PSC) for $510 million.

Once completed, this transaction will increase Shell’s ownership in the OML 118 PSC from 55% to 67.5%.

This targeted investment aligns with Shell’s goal of growing its combined Integrated Gas and Upstream total production by 1% per year to 2030 and sustaining its 1.4 million barrels per day of liquids production, the company said.

Also Read: Shell Chemical Division Sale To Improve Bottom Line: Analyst

The Bonga field itself is a deep-water development situated in OML 118, with water depths exceeding 1,000 meters.

Bonga North is estimated to hold over 300 million barrels of oil equivalent in recoverable resources and is projected to reach a peak production of 110,000 barrels of oil per day, with initial oil expected by the end of the current decade.

Production at Bonga began in 2005, initially capable of producing 225,000 barrels of oil per day. Notably, the Bonga field produced its one-billionth barrel of crude oil in 2023.

This acquisition represents a significant investment in Nigeria’s deep-water sector, contributing to sustained liquids production and growth in Shell’s Upstream portfolio. Peter Costello, Shell's President, Upstream, stated that the acquisition “brings another significant investment in Nigeria deep-water that contributes to sustained liquids production and growth in our Upstream portfolio."

For TotalEnergies, the sale is part of the company’s strategy to high-grade its Upstream portfolio, focusing on assets with low technical costs and low emissions, and aiming to lower its cash breakeven. Nicolas Terraz, President Exploration & Production at TotalEnergies, noted that in Nigeria, the company is shifting its focus to its operated gas and offshore oil assets, including the progression of the Ubeta project to sustain gas supply to Nigeria LNG.

The deal is pending regulatory approvals and other closing conditions, with completion anticipated by the end of this year.

Investors can gain exposure to Shell via Precidian ETFs Trust Shell plc ADRhedged and Abacus FCF Real Assets Leaders ETF .

Price Action: SHEL shares are trading higher by 0.89% to $66.63 premarket at last check Thursday.

Read Next:

Shell Q1 Profit Jumps 52%, Launches $3.5 Billion Stock Buyback