French energy supermajor TotalEnergies has hit a stumbling block after the collapse of a planned $860 million divestment in Nigeria, a development that could unsettle investors ahead of its annual strategy briefing.

According to reports, the deal with Mauritius-based Chappal Energies to acquire TotalEnergies’ 10% stake in the Shell-operated SPDC joint venture has fallen through. The SPDC partnership, one of the most established in Nigeria’s oil sector, oversees 18 oil and gas producing licences across the Niger Delta.

The proposed transaction, signed in July 2024, was part of TotalEnergies’ broader effort to streamline its portfolio and cut exposure to challenging upstream assets in Nigeria. However, with the collapse of the agreement, the company faces renewed scrutiny from analysts concerned about its ability to deliver on planned asset sales.

The timing is particularly sensitive, coming just days before TotalEnergies’ investor day. Market watchers warn that prolonged difficulties in completing divestments could weigh heavily on spending flexibility and compound pressure from rising debt levels.

Nigeria has long been a difficult operating environment for international oil companies, with security risks, regulatory bottlenecks, and community disputes frequently complicating transactions. The latest setback underscores the challenges facing TotalEnergies and other majors as they look to rebalance their portfolios while still funding ambitious growth projects worldwide.

TotalEnergies has not yet issued a formal statement on the failed deal.