Asset Swap: TotalEnergies Deepwater Focus Earnings Positive
TotalEnergies EP Nigeria Limited has entered into definitive agreements with Conoil Producing Limited to execute a strategic asset realignment involving two offshore Nigerian assets.
The deal sees TotalEnergies acquiring a 50% operated interest in OPL 257, while Conoil takes over TotalEnergies’ 40% participating interest in OML 136, a gas-rich block. Post-transaction, TotalEnergies will hold 90% of OPL 257, with Conoil retaining 10%.
OPL 257 is an offshore exploration block with a 2005 discovery, the PP261 structure, which holds significant upside. TotalEnergies plans to drill an appraisal well in 2026, leveraging its proximity to the Egina FPSO for a potential tieback development.
This could accelerate monetization and reduce costs. On the other hand, OML 136 is a gas-focused offshore block with long-term development potential. Conoil gains full control, aligning with its strategy to deepen its upstream gas footprint.
For TotalEnergies, the deal reinforces its focus on operated deepwater and offshore assets for full technical control, and gas and oil projects supporting near-term development cycles. It also highlights their emphasis on capital-efficient tiebacks using existing infrastructure like the Egina FPSO.
This move enhances TotalEnergies’ operational control in a key growth corridor, following recent milestones like the Ubeta FID in June 2024 and entry into PPL 2000/2001 in August 2025.
For Conoil, the acquisition of OML 136 adds a strategic gas asset, allowing greater value capture from development while reducing capital obligations for OPL 257 appraisal. Conoil retains a 10% stake in OPL 257, diversifying its portfolio.
The transaction strengthens TotalEnergies’ offshore portfolio, giving them near-full control of OPL 257 for streamlined decisions and faster appraisal.
The Egina tieback could lower capex and shorten development timelines, boosting project NPV. It aligns with TotalEnergies’ multi-year investment push in Nigeria’s offshore and gas sectors, balancing oil and gas projects for resilience.
Analysts describe the asset swap as a demonstration of TotalEnergies’ disciplined portfolio optimization in Nigeria. Consolidating 90% of OPL 257 positions them for a potentially high-value tieback development to Egina, while Conoil boosts its gas monetisation exposure. It’s a strategic, capital-efficient step aligned with TotalEnergies’ Nigerian offshore growth strategy.
The next steps include executing the 2026 appraisal drilling campaign on OPL 257, beginning early-stage development studies with Egina tieback options, advancing regulatory engagements for transaction completion, and integrating OPL 257 into TotalEnergies’ deepwater production planning cycle.
Overall, the TotalEnergies-Conoil asset realignment marks a strategic strengthening of TotalEnergies’ deepwater portfolio in Nigeria, with a clear path to a tieback-led development strategy, reinforcing its role as a leading offshore operator. Banks Reduce Interest in CBN Placement as SDF Rate Falls
Adebara Qudus, Research Analyst
