President Muhammadu Buhari has approved the acquisition of Exxon Mobil shares in the United States of America by Seplat Energy Offshore Limited.
The approval came after the initial rejection of the acquisition by the federal government
Exxon Mobil had entered into a landmark Sale and Purchase Agreement with Seplat Energy to acquire the entire share capital of Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation, Mobil Development Nigeria Inc, and Mobil Exploration Nigeria Inc, both registered in Delaware, USA.
Considering the extensive benefits of the transaction to the Nigerian Energy sector and the larger economy, President Buhari has given Ministerial Consent to the deal.
The President, in commitment to investment drive in light of the Petroleum Industry Act, granted consent to the Share Sales Agreement, as requested by the parties to the transaction, and directed that the approval be conveyed to all the parties involved.
Exxon Mobil/Seplat are expected to carry out operatorship of all the oil mining licenses in the related shallow water assets towards production optimization to support Nigeria’s OPEC quota in the short term as well as ensure accelerated development and monetization of the gas resources in the assets for the Nigerian economy.
President Buhari also directed that all environmental and abandonment liabilities be adequately mitigated by Exxon Mobil and Seplat.
It would be recalled that the Nigerian National Petroleum Company (NNPC) Limited had through a lawsuit sought to block the sales of Exxon Mobil assets to Seplat Energy Plc because it wants to claim pre-emption rights over these assets and take over the permits itself.
The state-owned oil giant had won a court decision which temporarily blocked Exxon Mobil Corporation from selling its Nigerian assets to Seplat.
An Abuja Federal High Court Judge had on July 6, 2022, granted NNPC an order of interim injunction, barring Exxon Mobil from completing any divestment in a unit that ultimately operates 4 licenses in Nigeria.
Seplat had in a statement said that NNPC, which sued Mobil Producing Nigeria Unlimited on July 5, 2022, also wants in the alternative, an order for them to take the matter to arbitration.
Seplat, which was not a party to the lawsuit, said its deal with Exxon was “still valid” with the company remaining confident that the matter will be brought to a proper conclusion in accordance with the law.
Seplat had on February 25, announced an agreement to acquire the entire share capital of Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation, Delaware for $1.28 billion.
ExxonMobil Nigeria’s shallow water business is an established, high-quality operation with a highly skilled local operating team and a track record of safe operations, producing 95 kboepd in 2020 (92% liquids).
The Federal Government had in May 2022, refused to give its consent to the transaction, attributing its decision to reject the deal due to overriding national interest, among other reasons.
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