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.
According to Bloomberg, Seplat 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.
Back story
- Recall that on February 25, Seplat Energy Plc announced an agreement to acquire the entire share capital of Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation, Delaware for $1.28 billion.
- The transaction entails the acquisition of ExxonMobil Nigeria’s entire offshore shallow water business. According to the notice, 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).
- However, NNPC, had opted to exercise its Right of First Refusal (RFR) on the sale of the assets. The RFR is reportedly contained in the Joint Operating Agreement (JOA) of the Joint Venture (JV), which represents NNPC’s position on the planned sale of the shares to Seplat Energy Plc.
- 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.
- The acquisition is expected to give Seplat additional production of about 95,000 barrels of oil equivalent a day from shallow-water assets that Exxon operated in a joint venture with NNPC.
