The President of Nigeria, Bola Tinubu, has said the $1.28 divestment deal between ExxonMobil and Seplat Energy will receive ministerial approval in a matter of days.
Tinubu made this disclosure during his Independence Day address to Nigerians on Tuesday, at the State House in Abuja.
The President announced that the regulatory body, NUPRC, has approved the deal involving ExxonMobil’s sale of its onshore assets to Seplat Energy.
Tinubu said the ministerial approval is in line with the Petroleum Industry Act (PIA) in order to complete the divestment deal between the two oil majors.
“Fellow compatriots, our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes.
“This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively.
“As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector,” Tinubu said.
Backstory
On February 25 2022, Seplat Energy Plc disclosed its plan to purchase all shares of Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation, Delaware for $1.28 billion.
The deal Involved taking over ExxonMobil Nigeria’s offshore shallow water operations.
However, NNPC decided to invoke its Right of First Refusal (RFR) regarding the sale of these assets.
This RFR is specified in the Joint Operating Agreement (JOA) of the Joint Venture (JV), which outlines NNPC’s stance on Seplat Energy Plc’s intended purchase of the shares.
In May 2022, the federal government declined to approve the transaction, citing overriding national interest among other reasons for its decision.
In addition, on July 6, 2022, a judge in Abuja issued an “order of interim injunction” that prohibits Exxon from finalizing any divestment in a subsidiary that holds four licenses in Nigeria.
Meanwhile, in July 2024, NNPC withdrew the lawsuit and approved that the sale be finalized according to the PIA.
What you should know
Moreover, ExxonMobil is not the only international oil company (IOC) deciding to move offshore and employing a divestment strategy to offload its stakes in the onshore segment of the oil and gas sector.
In January, oil major, Shell Plc, reached an agreement to sell its Nigerian onshore oil assets to a local consortium for over $1.3 billion, pending government approval.
In addition to the initial sum, Shell anticipates receiving extra payments of up to $1.1 billion. The purchasing consortium, named Renaissance, comprises ND Western, Aradel Energy, First E&P, Waltersmith, and Petrolin.
Similarly, TotalEnergies stated plans to offload its minority stake in a significant Nigerian onshore oil joint venture following Shell’s divestment announcement.
