Closing oil & gas chapters in Azerbaijan and Nigeria garners $2 billion for Equinor’s portfolio enhancement

Norway’s state-owned energy giant Equinor has crossed the finish line for the divestment of its upstream assets in Azerbaijan and Nigeria, bringing a consideration of up to $2 billion to fuel the firm’s oil and gas portfolio optimization mission.

Following more than three decades spent as a business partner in Azerbaijan and Nigeria, Equinor took steps to leave both countries last year, with the completion occurring on November 29 and December 6, 2024, respectively. The Norwegian giant’s disposal of these assets is part of its efforts to optimize its international oil and gas portfolio and focus on core areas.

While the firm’s agreement with State Oil Company of Azerbaijan Republic (SOCAR) enabled the sale of its remaining assets in Azerbaijan, the deal with Chappal Energies also allowed Equinor to close up shop at its Nigerian business, including a stake in a Chevron-operated Agbami oil field.

Philippe Mathieu, Executive Vice President for International Exploration and Production in Equinor, commented: “With these exits we realise value and execute on our strategy to focus the international portfolio, and in combination with recent acquisitions and investments in our competitive projects, we seek to sustain long-term production and profitability.”

The disposal of assets in Azerbaijan will result in a total cash consideration of $745 million. On the other hand, the value of the transaction in Nigeria amounts to $1.2 billion, encompassing a purchase price of $710 million and the remainder in contingent payments. The Norwegian player sees these exits as a way to enable the deepening of investments in countries where it has identified the potential to add the most value and build “a more focused and robust international portfolio.”

Mathieu elaborated: “Azerbaijan and Nigeria have been important countries in our international portfolio for decades. Together with partners and suppliers, we have created significant value for Equinor and society at large. I would like to thank them and our employees in Azerbaijan and Nigeria for their great work and dedication over the years and wish our people well in the transition of their professional journey.”

Furthermore, the total equity production from the assets in Azerbaijan and Nigeria is said to have been 24,600 and 18,700 barrels of oil per day on average, respectively, during the first three quarters of 2024. The Norwegian firm believes closing these transactions will positively impact the cash flow for the fourth quarter of 2024.

During its capital markets update in February 2024, Equinor disclosed its expectation to sustain an average cash flow from operations after tax from oil, gas, and trading at around $20 billion through 2035. The Norwegian player has pinpointed its international upstream business as a key to delivering on this with an expected 50% increase in the cash flow from this segment by 2030.

Other energy giants, such as ExxonMobil, Shell, TotalEnergies, and Eni also made moves to either fully or partially exit Nigeria’s oil and gas sector. Meanwhile, Equinor continues to actively pursue new hydrocarbon opportunities, as confirmed by its agreement with Shell, which enables the duo to combine their offshore oil and gas assets in the UK.

The two energy giants hope to create a joint venture company that will be the largest independent oil and gas player in the British sector of the North Sea.