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Two Years After, NNPC, ExxonMobil Sign Agreement on $1.28bn Asset Divestment to Seplat Energy

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The Nigerian National Petroleum Company Limited has announced the signing of a settlement agreement for the divestment of ExxonMobil’s stake in Mobil Producing Nigeria Unlimited (MPNU) to Seplat Energy Plc.

In a statement released on Thursday, NNPC confirmed that the agreement was signed in collaboration with MPNU, Mobil Development Nigeria Inc., and Mobil Exploration Nigeria Inc. “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,” the statement read.

This development comes after President Bola Tinubu directed the Ministry of State for Petroleum Resources (Oil) and NNPC on May 28 to resolve the long-standing divestment issue that had delayed the Seplat and ExxonMobil deal.

The transaction, which has faced delays for over two years, initially saw Seplat announcing an agreement in February 2022 to acquire ExxonMobil’s 40 percent stake in MPNU, with the expectation that the deal would close in the second half of that year. However, the Nigerian Upstream Petroleum Regulatory Company (NUPRC) declined to approve Seplat’s proposed acquisition on May 19, 2022, citing “overriding national interest.”

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Further complicating the situation, NNPC secured a court injunction two months later, restraining ExxonMobil from selling its Nigerian assets. This legal action was followed by former President Muhammadu Buhari reversing his authorisation for the acquisition on August 10, 2022, only days after initially granting approval.

Despite these setbacks, Seplat extended the share sale and purchase agreement (SSPA) with ExxonMobil in May 2023 amid ongoing efforts to secure the necessary approvals. On May 17, Seplat indicated that progress was being made with the acquisition of MPNU assets, subsequently extending the SSPA a week later.

With the recent signing of the settlement agreement, the divestment process appears to be moving forward, potentially bringing closure to a protracted and contentious transaction.

With the conclusion of this transaction, 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.

Ozioma Samuel-Ugwuezi 

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