Seplat On Verge Of Concluding $1.3bn ExxonMobil Asset Purchase

Indigenous oil firm Seplat is now moving towards achieving its expansion goal with more asset acquisition as the federal government appears ready to resolve the impasse that almost denied the firm a deal with ExxonMobil. Federal government officials in a deliberate move had met with a team from Seplat Energy, to resolve the stalemate arising from the proposed $1.3 billion ExxonMobil’s oil asset sale which has now been held up for close to two years.

Minister of State, Petroleum (Oil), Senator Heineken Lokpobiri, dropped this hint after a meeting in Abuja that broadly discussed ways to resolve the prolonged altercation. On his verified X/Twitter handle, Lokpobiri stressed that the matter needed to be quickly settled because Nigeria wants to ‘‘aggressively’’ ramp up its crude oil production, which has tanked for more than three years.

However, under the deal unveiled in February 2022, Seplat had agreed to pay the sum for an ExxonMobil unit that holds a 40 per cent operating stake in four shallow-water licences. If the transaction succeeds, it will be one of the biggest divestments in Nigerian history, since energy majors like Shell Plc started offloading unwanted assets in the late 2000s.

Nigeria’s former President Muhammadu Buhari, who doubled as Nigeria’s oil minister, endorsed the sale in August last year, before swiftly rowing back after the country’s energy regulator, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) rejected his approval. The Nigerian National Petroleum Company (NNPC) Limited  which holds 60 per cent of the permits had objected to the sale and sued ExxonMobil claiming it had the right to acquire the blocks itself from the US major.

The NNPC, insisted that it had the first refusal rights and has since then blocked the deal between Seplat and ExxonMobil, which Seplat also rejected. “What we are buying are shares sold by US companies, so that is completely different because we’re buying a company,” Seplat’s Chief Executive, Roger Brown said recently.

The “hidden value” for Seplat in the Exxon deal is the natural gas in the blocks, according to Brown, whose firm is already one of the largest domestic suppliers of the fuel to Nigerian power plants. However, in June, officials of ExxonMobil visited President Bola Tinubu in Abuja, where the President pledged to ensure competition in the oil and gas industry in the country.

Exxon Nigeria controls four oil mining leases (OMLs 67, 68, 70, 104) and its portfolio includes one of Nigeria’s largest export facilities, the Qua Iboe Terminal. It also has a 51 per cent interest in Bonny River Terminal and Natural Gas Liquids Recovery Plants at East Area Projects (EAP) and Oso.Lokpobiri noted that the meeting with the Seplat team was fruitful, describing it as a significant step to ending the stalemate. “In pursuit of resolving the ExxonMobil and NNPC divestment dispute, as per our mandate to aggressively increase production, I engaged in constructive discussions with Seplat Energy,  led by its Managing Director, Mr. Roger Brown.

“Our deliberations were incredibly fruitful, marking a significant step forward in ending the impasse and paving the way for the nation to reap prosperity from the assets acquisition,” Lokpobiri added. In a bid to remove all the bottlenecks to Nigeria’s oil output, the Federal Government had during the week withdrawn court cases against Eni and Shell.