ExxonMobil’s $1.28bn Nigerian Assets Sale To Seplat Could Be Approved Within Two Weeks, Says NUPRC

ExxonMobil’s Nigerian petroleum assets sale to Nigeria’s Seplat could be approved in less than two weeks, the country’s oil regulator, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), said on Thursday.

The news came a day after it was revealed that NUPRC was trying to speed up the conclusion of regulatory oversight on the ongoing oil assets divestment by International Oil Companies (IOCs).

When the pending transactions are concluded, Nigeria could add at least 700,000 barrels per day (bpd) to its current daily crude oil production volume, to hit about two million bpd before the end of the year.

In February 2022, Seplat Energy announced its acquisition of oil and gas assets belonging to Mobil Oil Producing Nigeria Unlimited (MPNU), in a deal seen at the time as the first since the signing of the Petroleum Industry Act (PIA) by then President Muhammadu Buhari in August 2021.

Seplat Energy Plc had entered into the Sale and Purchase Agreement to acquire the entire share capital of MPNU for a purchase price of $1.283 billion plus up to $300 million contingent consideration.

The transaction encompassed the acquisition of the entire offshore shallow water business of ExxonMobil in Nigeria to create one of the largest independent energy companies in the country.
However, since then, the deal, which is awaiting ministerial consent and other required regulatory approvals, has been stalled.

Recently, Chief Executive of NUPRC, Gbenga Komolafe, reiterated the criteria to be met before any divestment might be concluded. He listed some of them as due diligence relating to host communities, the financial strength of the interested buyer, resolution of Decommissioning and Abandonment issues, technical competence, the legal status of the party, among others.

However, a Reuters report stated on Thursday that the $1.28 billion sale in Africa’s largest oil exporter, which had awaited regulator approval since 2022, could be signed off on in less than two weeks.
Komolafe told the news organisations that the parties involved would be invited to a meeting on Friday (today).

“Subject to the outcome of the meeting, consent…could be given in less than two weeks from the date of the meeting,” he said.

NUPRC would give the companies two mutually exclusive options that, if accepted, would permit approval of the deal, he said.

He did not spell out what the options were but said the law required money to be set aside for decommissioning, host community development and environmental remediation.

THISDAY earlier reported exclusively that the two options on the table for the interested parties were either to wait for the full audit of the process to be completed before signing off on the deal or conclude pending when the assessments were released.

However, the latter option comes with a proviso that whatever is the eventual outcome of the review must be accepted by the buyers.

“As a commission, we don’t want our nation to carry unwarranted financial burdens arising from the operations of the assets over time by the divesting entities,” Reuters quoted Komolafe as saying.

A spokesperson for Seplat declined to comment. An Exxon spokesperson did not immediately comment.

Observers said approving the deal would bring much needed investment into Nigeria’s petroleum sector. While it is pending, there is little incentive to put money into the assets, which means production will gradually decline.
Former Buhari initially consented to the transaction, but withdrew that consent days later after the oil regulator refused to sign off on it.

President Bola Tinubu, who took office last year, has made attracting investment a key priority.
Last year June, just over a week after taking over the reins of government, Tinubu welcomed a team from the company where he had earlier worked as a treasurer to the State House.

The president tweeted after the meeting, “It was a pleasure to play host to Exxon Mobil executives, Liam Mallon and Adesua Dozie at the State House earlier today. The meeting marks the continuation of this administration’s efforts to secure the collaboration of critical players in the oil sector towards ensuring stability, transparency, and fair competition in the sector.”

Emmanuel Addeh

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