Chevron Deepens West Africa Push with Nigerian Offshore Stake
Energy giant acquires 40% interest in two exploration licenses from TotalEnergies, expanding a global collaboration in a key hydrocarbon basin.
Chevron Corp. (NYSE: CVX) has acquired a 40% stake in two Nigerian offshore exploration licenses from TotalEnergies, a move that deepens the strategic collaboration between the two energy supermajors and expands Chevron’s footprint in the increasingly active West African deepwater region.
The deal sees Star Deep Water Petroleum Limited, a Chevron subsidiary, taking a significant non-operated interest in Petroleum Prospecting Licences (PPL) 2000 and 2001. The licenses are located in the prolific West Delta basin, covering an area of approximately 2,000 square kilometers. Following the transaction, which is subject to regulatory approval, TotalEnergies will remain the operator with a 40% share, with South Atlantic Petroleum holding the remaining 20%.
This farmout agreement is the latest step in a growing partnership between the two oil giants. It follows a June agreement where TotalEnergies acquired a stake in 40 of Chevron's exploration blocks in the U.S. Gulf of Mexico. The synergy was further highlighted by Chevron's recent appointment of Kevin McLachlan, a former TotalEnergies executive, as its new vice president of exploration, signaling a strategic alignment in their global exploration philosophies.
“After launching our joint venture in US offshore exploration in June, we’re delighted to now expand our collaboration to Nigeria to unlock new resources in the West Delta basin,” said Nicola Mavilla, Senior Vice-President Exploration at TotalEnergies, in a statement. Mavilla added that the venture aims to “derisk and develop new opportunities in Nigeria, in line with the objectives of the country.”
The move comes as Nigeria’s offshore oil sector experiences a significant resurgence in investment. The country has attracted over $8 billion in deepwater Final Investment Decisions (FIDs) over the past year, with competitors like ExxonMobil and Shell committing billions to new and existing projects. Chevron's investment positions it to capitalize on this renewed industry focus, which is supported by policy reforms and a new petroleum licensing round that commenced this month.
For Chevron, a company with a market capitalization of over $300 billion, the transaction aligns with a broader strategy of optimizing its portfolio by divesting from some mature onshore assets while acquiring high-potential deepwater resources. The company recently expanded its West African presence by acquiring two deepwater blocks off the coast of Guinea-Bissau.
While the financial impact of this early-stage exploration deal is long-term and speculative, it underscores Chevron’s commitment to replenishing its reserves and pursuing growth opportunities in proven hydrocarbon regions. Shares of Chevron were trading up about 1% at $151.13 in late-day trading. Analysts maintain a consensus price target of around $172 on the stock, reflecting cautious optimism about the company's strategic direction amid a complex energy market.
The West Delta licenses were originally awarded to the TotalEnergies and South Atlantic Petroleum consortium during Nigeria’s 2024 Exploration Round. The next steps for the new partnership will involve detailed seismic studies and analysis to identify potential drilling targets, a capital-intensive process that marks the beginning of a multi-year journey to potential production.