To Ramp up Oil Production, FG Moves to Resolve Dispute over Sale of $1.3bn ExxonMobil’s Assets

The federal government has 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. It wasn’t clear what the details of the meeting which took place in Abuja were, but the Minister of State, Petroleum (Oil), Senator Heineken Lokpobiri, hinted that it bordered on 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 Exxon unit that holds a 40 per cent operating stake in four shallow-water licenses.

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.
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.

State-owned Nigerian National Petroleum Company Limited (NNPC) which holds 60 per cent of the permits — had opposed the sale and sued Exxon in the capital, Abuja, claiming it had the right to acquire the blocks itself from the US major.
The national oil company insisted that it had the first refusal rights and has since then blocked the deal between Seplat and ExxonMobil. But Seplat had disagreed with the NNPC.

“What we are buying are shares sold by US companies, so that is a completely different animal 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.

Also in June, THISDAY reported that 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.