NNPC Withdraws Case Halting ExxonMobil’s $1.3bn Assets Sale to Seplat

The Nigerian National Petroleum Company Limited (NNPC) has moved to withdraw its legal challenge to ExxonMobil Corporation’s sale of its oil and gas assets to Seplat Energy Plc., removing a hurdle that stalled the conclusion of the deal.

The NNPC has therefore applied to a high court in the nation’s capital Abuja to drop the case, its legal firm Afe Babalola confirmed to Bloomberg by email on Thursday.

It is coming weeks after the national oil company and ExxonMobil, finally, agreed on a settlement deal for the  assets’ divestment plan by the American oil major.

At the time NNPC, in a short message, announced on its X page that the agreement will pave the way for the International Oil Company (IOC) to sell off its 100 per cent interest to Seplat Energies after the settlement.

The national oil company stated: “(A) settlement agreement between NNPC Ltd and Mobil Producing Nigeria Unlimited, Mobil Development Nigeria Inc., and Mobil Exploration Nigeria Inc. (has been) signed regarding the proposed divestment of a 100 per cent interest in Mobil Producing Nigeria Unlimited to Seplat Energy Offshore Limited.”

NNPC followed it up with some images from the event, comprising some of the top officials of the organisation, including its Executive Vice President (Upstream), Oritsemeyiwa Eyesan; Chief Upstream Investment Officer, NNPC Upstream Investment Management Services (NUIMS), Mr. Bala Wunti; and some top ExxonMobil executives. 

The consummation of the agreement had been delayed since February 2022, after NNPC first announced that it had a right of first refusal to the assets that were up for divestment.

The industry regulator, Nigerian Upstream Petroleum Regulatory Company Limited (NUPRC), had also raised issues with the process leading to the announcement, insisting that due diligence must be carried out.

It argued  that the process could not move forward when both joint venture partners hadn’t agreed on the deal.

Bloomberg, in the report, stated that the withdrawal of the case followed an agreement reached last month between the NNPC and Exxon to conclude the  deal based on terms that were not disclosed.

In court documents seen by Bloomberg, all parties agreed that the NNPC could resume its case if the terms of the settlement were not met.

The Exxon sale to Seplat, which was signed in February 2022, still requires approvals from the NUPRC which had indicated an August deadline, and the Nigerian President Bola Tinubu, who is the substantive oil minister.

Adding the blocks to Seplat’s assets will swell the company’s natural gas fields in an area where it is already one of the biggest suppliers of domestic gas to Nigerian power plants. It would almost quadruple Seplat’s output to more than 130,000 barrels a day.

Another divestment deal by Shell Plc, which agreed to sell its Nigerian onshore oil business to a consortium of local companies for more than $1.3 billion, is also awaiting approval after it was announced in January.

Also the planned sale of NAOC’s assets to Oando, has been pending since September 2023.

Emmanuel Addeh

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