How Mauritius-Based Startup Chappal Energies Took Nigerian Oil Sector By Storm
Chappal Energies Mauritius Limited, which was registered in May 2022, snapped up stakes in key Nigerian oil and gas assets last year from two multinational energy majors, Norway-based Equinor and France’s TotalEnergies.
The Nigerian-owned upstart agreed in November 2023 to acquire Equinor Nigeria Energy Company, which held a 53.85% ownership in oil mining lease (OML) 128, including a 20.21% stake in the Agbami field, operated by Chevron. The company announced the completion of the $1.2 billion acquisition in December last year, with Mauritius banking group MCB contributing $120 million to its financing.
In July 2024, Chappal Energies signed a sale and purchase agreement for the purchase of TotalEnergies EP Nigeria’s 10% interest in the Shell Petroleum Development Company Joint Venture (SPDC JV) licences for a consideration of $860 million.
SPDC JV was an unincorporated joint venture between state-owned Nigerian National Petroleum Corporation Ltd (55%), Shell Petroleum Development Company of Nigeria (30%, operator), TotalEnergies EP Nigeria (10%) and Nigerian Agip Oil Company (5%). Renaissance Africa Energy Company now holds a 30% stake following its acquisition of SPDC, while Oando has 5%.
TotalEnergies EP Nigeria sold its 10% participating interest and all its rights and obligations in 15 licences of SPDC JV, which are producing mainly oil. It also transferred to Chappal Energies its participating interest in the three other licences, which are producing mainly gas (OML 23, OML 28 and OML 77), while retaining full economic interest in these licenses, which currently account for 40% of Nigeria LNG gas supply.
In December, Chappal Energies sold 5.14% of its equity to Aradel Holdings, a Nigerian listed oil and gas independent formerly Niger Delta Petroleum Resources, for an undisclosed sum.
READ MORE: [REVEALED] Aradel’s Stakes in Renaissance and Chappal Energies Cost N56bn
How the journey started
In March 2020, Chappal Petroleum Development Company Limited was registered in Nigeria.
The company was founded by Ufoma Immanuel, an ex-banker in the UK and Dubai who headed corporate finance and strategy at Eroton Exploration and Production Company, operators of OML 18; Victor Imevbore, a petroleum engineer and CEO of Environmental Resources Managers Limited; and Yomi Awobokun, a former CEO of Oando Downstream who later led Enyo Retail and Supply Limited, which was acquired in 2021 by Ardova. They were later joined by industry veteran Austin Avuru, who became the chairman of the company.
“We identified a gap in the industry that we can address via long-term investment through the commodity cycle; we are focusing on mature brownfield reservoirs, building and/or rehabilitating associated infrastructure, and the development of ancillary gas projects,” Immanuel, managing director of the company, said in a ThisDay interview in November 2021.
The company had in 2020 sent unsolicited expressions of interest to two majors including ExxonMobil in search of bilateral transactions, and it was invited in December that year by the US oil giant to submit non-binding bids for the share sale of its subsidiary Mobil Producing Nigeria Unlimited in March 2021, according to Avuru’s book ‘My Entrepreneurship Journey’.
In the final stage, the company joined forces with London-listed Cairn Energy, which was its joint venture/technical partner, and had to compete with Seplat Energy, a Nigerian oil firm which Avuru led as pioneer CEO for 10 years until July 2020.
On November 4, 2021, Chappal was invited to a meeting where ExxonMobil informed it that its management committee had, “on balance of risks, chosen the other party as preferred bidder while you are the reserve bidder”.
Seplat announced the following month that it had terminated the contract of appointment of Avuru as a non-executive director for “breaches of the company’s corporate governance policies and his fiduciary duties”. Avuru rejected the action, describing it as “ill-advised” and “grossly mischievous”.
His termination was a result of the conflict of interest issues caused by his involvement in Chappal.
Six months after Chappal lost its bid to acquire MPN, Chappal Energies Mauritius was registered in the Island country. The move may have been occasioned by the dispute between Avuru and Seplat board.
READ MORE: Seplat Energy eyes ‘swift completion’ of ExxonMobil subsidiary acquisition
The people behind Chappal Energies Mauritius
Immanuel, the managing director of Chappal Energies, told Bloomberg in December that the company’s current shareholders were largely in three groups. “There is management, who own a portion of the equity, there is family office and strategic partnerships,” he said, without giving names of specific shareholders.
The company has four directors, including Immanuel and Imevbore, according to its website.
William (Bill) Higgs, who chairs the board of directors, is a former CEO of Genel Energy Plc, Ophir Energy Plc and Mediterranean Oil and Gas Plc. He previously worked at Chevron, serving as senior operations vice president of Saudi Arabian Chevron, among other roles.
Another member of the board is Adesola Oyinlola, the first Nigerian managing director of Schlumberger Group in Nigeria and Gulf of Guinea, who rose through the executive ranks to vice president and group treasurer, in Houston and Paris as well as chairman in charge of Africa and global head of sustainability and ESG, Schlumberger Group, in Houston, US. He retired in June 2015.
