Indigenous oil company Seplat is advancing toward its expansion objectives by pursuing further asset acquisitions, as the federal government signals readiness to resolve the deadlock that nearly obstructed Seplat’s deal with ExxonMobil.
In a concerted effort, government officials engaged with a Seplat Energy team to address the prolonged stalemate surrounding the proposed $1.3 billion sale of ExxonMobil’s oil assets, which has lingered for nearly two years.
Senator Heineken Lokpobiri, Minister of State for Petroleum (Oil), hinted at progress following a meeting in Abuja that extensively explored avenues to resolve the protracted dispute.
Lokpobiri emphasized the urgency of resolving the matter swiftly as Nigeria aims to “aggressively” boost its crude oil production, which has been on a decline for over three years.
The deal, unveiled in February 2022, involves Seplat acquiring an ExxonMobil unit holding a 40% operating stake in four shallow-water licenses.
Should the transaction materialize, it would mark one of the most significant divestments in Nigerian history, reminiscent of energy majors like Shell Plc shedding unwanted assets in the late 2000s.
Former Nigerian President Muhammadu Buhari, who also served as the nation’s oil minister, initially supported the sale in August last year. However, he later retracted his endorsement after the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the country’s energy regulator, rejected his approval.
The Nigerian National Petroleum Company (NNPC) Limited, holding 60% of the permits, opposed the sale and took legal action against ExxonMobil, claiming its right to directly acquire the blocks 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.