Tinubu Helps NNPC, ExxonMobil Complete Oil $1.3bn Deal After 2 Years
- The NNPC Limited has approved the sale of assets by ExxonMobil to Seplat Energy after 2 years wait
- The deal, worth N1.2 billion, is one of the most significant transactions in the Nigerian oil and gas sector in recent years
- The deal was reached following the intervention of President Bola Tinubu after a meeting with the companies' officials
The Nigerian National Petroleum Company Limited (NNPC Ltd) has reached a settlement agreement with Mobil Producing Nigeria Unlimited, Mobil Development Nigeria Inc., and Mobil Exploration Nigeria over the sale of ExxonMobil assets to Seplat Energy Plc for $1.3 billion.
The deal had been on hold for two years, but President Bola Tinubu's intervention following two high-level visits ended the impasse.
Source: Getty Images
Following the agreement, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) will now close the deal by granting the parties involved the Subject-to-Clearance Consent within 30 days.
ExxonMobil will sell its 40% stake in MPNU assets to Seplat Energy Plc.
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NNPC clears path for the sale of oil assets
The $1.3 billion deal between ExxonMobil and Seplat Energy involves four oil mining licenses, more than 90 shallow-water and onshore platforms, and 300 producing wells.
Punch reports that the transaction has been delayed for over two years due to disputes between the parties and a court ruling that temporarily prevented ExxonMobil from selling its assets to Seplat Energy.
How the issues started with the deal
It all started in 2022, Seplat Energy confirmed signing a Sale and Purchase Agreement with ExxonMobil Corporation, subject to regulatory and ministerial approvals.
NNPC Ltd, which holds the Federal Government's equity interests in all joint venture operations in Nigeria, including MPNU, triggered a dispute over the deal.
The national oil company argued that ExxonMobil was obligated to offer it the preemptive right of first refusal to buy its shares in Nigeria, citing its long-standing joint partnership with MPNU.
NNPC also claimed that Nigerian assets were among its prime targets for planned takeovers and acquisitions following the divestment plans by International Oil Companies (IOCs) from Nigeria.
In May 2022, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) received a letter from Seplat Energy confirming the ExxonMobil share sale deal.
However, the Commission declined the mandatory regulatory ministerial consent to formalize the deal in the overriding national interest.
Subsequently, NNPC filed a case in the High Court of the Federal Capital Territory, Abuja, to stop ExxonMobil from proceeding with the transaction. In July 2022, the court granted an ex-parte order of interim injunction in favour of NNPC, restraining ExxonMobil and its shareholders from completing the Share Sale and Purchase Agreement with Seplat Energy.
How Tinubu ended the disagreements
This dispute has persisted for over two years. However, in June 2023, ExxonMobil officials, led by Liam Mallon, president of ExxonMobil Upstream Company, visited Tinubu to discuss the deal.
During another courtesy call with the president to address related matters, the team revisited the issue again on Tuesday, May 28, 2024.
In response to these visits, the president directed Senator Heineken Lokpobiri, minister of state for petroleum (Oil), to resolve the divestment issues between ExxonMobil and Seplat Energy and finalize the deal.
Nigeria discovers another oil well
Ealier, Legit.ng reported that the Nigerian National Petroleum Company Exploration and Production Limited (NNPC E&P Ltd), a subsidiary of NNPC and Natural Limited Oilfield Services Limited (NOSL), announced the successful commencement of oil production at Oil Mining Lease (OML) 13 in Akwa Ibom state.
The NNPC announced this in a statement signed by its chief corporate communications officer, Olufemi Soneye, on Sunday, May 12, 2024.
It said the production, which began on May 6, 2024, with about 6,000 barrels of oil, is expected to be ramped up to 40,000 barrels daily by May 27, 2024.
Proofreading by James Ojo Adakole, journalist and copy editor at Legit.ng.
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Source: Legit.ng
