June 24 (Reuters) - Africa Oil said on Monday it had agreed to buy out BTG Pactual Oil & Gas's 50% holding in their Prime Oil & Gas joint venture, in a deal that will see BTG become a major shareholder in Africa Oil.

Prime has offshore producing assets in Nigeria and accounts for 100% of Africa Oil's reserves and production. The deal is expected to be completed in the third quarter of 2025.

Shares in Toronto-listed Africa Oil were up more than 6% after the announcement.

On completion, BTG is expected to hold about 35% of Africa Oil's enlarged share capital and to nominate Huw Jenkins as non-executive chair of the board and two other non-executive directors, Africa Oil said.

BTG, Brazil's largest independent investment bank, in turn agreed to give Africa Oil a "first look at potential equity investments in upstream oil and gas assets and companies" in Africa.

The agreement will "enhance our operations, deliver identifiable savings, and increase our capital returns to shareholders on a sustainable basis," said Africa Oil President and CEO Roger Tucker.

The Prime joint venture owns an 8% participating interest in Chevron's deep-water asset in the Agbami field and another 16% interest in three offshore fields operated by TotalEnergies. (Reporting by Arunima Kumar and Deep Vakil in Bengaluru; Editing by Jan Harvey and Mark Potter)