Finally, there is hope on the horizon for the ExxonMobil/Seplat deal, as the Nigerian National Petroleum Company (NNPC) Limited has announced the signing of a settlement agreement facilitating the divestment of ExxonMobil’s stake in Mobil Producing Nigeria Unlimited (MPNU) to Seplat Energy Plc.
The NNPC in a statement on Thursday said the entities that signed the agreement include MPNU, Mobil Development Nigeria Inc., and Mobil Exploration Nigeria Inc.
NNPC stated: “Settlement agreement between NNPC Ltd. and Mobil Producing Nigeria Unlimited, Mobil Development Nigeria Inc., and Mobil Exploration Nigeria Inc. signed regarding the proposed divestment of a 100% interest in Mobil Producing Nigeria Unlimited to Seplat Energy Offshore Limited.”
This development comes after a directive from President Bola Tinubu to the Ministry of State for Petroleum Resources (Oil) and NNPC on May 28 to resolve the divestment issue that had stalled the Seplat and ExxonMobil deal for over two years.
According to a ThisDay report, Tinubu had assured the ExxonMobil delegation that the federal government was committed to resolving the divestment issues between NNPC and Seplat Energy.
Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri stated, “Mr. President has given a clear directive to the NNPC GCEO and I to resolve the issue of divestment, and we are doing whatever we can to achieve that.”
Lokpobiri had earlier revealed that Nigeria lost $34 billion in the last two and a half years due to the fall in production from the assets being divested by ExxonMobil to Seplat Energy, as assets declined from 600,000 barrels per day (bpd) to current 120,000bpd, leaving a shortfall of 480,000bpd, which he said amounted to $34 billion loss at a conservative $80 per barrels, in the last two and a half years.
In February 2022, Seplat announced an agreement to acquire ExxonMobil’s 40 percent stake in MPNU, expecting the transaction to be completed in the second half of the year. However, on May 19, 2022, the Nigerian Upstream Petroleum Regulatory Company (NUPRC) declined to approve Seplat’s proposed acquisition, citing “overriding national interest.”
Two months later, Seplat reported that NNPC had secured a court injunction preventing ExxonMobil from selling its assets in Nigeria. This opposition led former President Muhammadu Buhari to reverse his initial authorization for the acquisition on August 10, 2022, shortly after granting approval.
Amid the delay in securing approval, Seplat extended the share sale and purchase agreement (SSPA) with ExxonMobil for the acquisition of its stake in MPNU in May 2023. On May 17, Seplat indicated progress in acquiring MPNU assets, and a week later, the company extended the SSPA again.
With the recent signing of the settlement agreement, 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.