President Bola Tinubu has said he is committed to the quick resolution of the divestment issues between ExxonMobil and indigenous energy company, Seplat Energy.
This is contained in a statement by the president’s spokesperson, Ajuri Ngelale, during the president’s meeting with the president of ExxonMobil, Liam Mallon, and other executives of the company in the state house in Abuja on Tuesday.
In February 2022, Seplat Energy took steps to purchase Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil for $1.28 billion, marking part of ExxonMobil’s divestment strategy in Nigeria.
However, the transaction has not been completed because the Nigerian National Petroleum Company Limited (NNPCL) secured a court ruling that temporarily prevents Exxon Mobil Corporation from selling its assets in Nigeria to Seplat Energy.
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.
In response to this situation, the president stated that the federal government is dedicated to resolving the divestment disputes currently in litigation between the company and Seplat Energy.
What the President is saying
The President, who lauded ExxonMobil as a valuable partner in Nigeria’s development for many years, encouraged the company to continue supporting the success of his administration.
“Nigeria is going through a lot of reforms, and we have been navigating the leadership quarters carefully to ensure that we achieve a win-win situation for all parties and attract more investments.
“We have been pushing for closure on divestment issues, and I believe the other party, Seplat, is open to this,” the President said.
More Insights
- On his part, Heineken Lokpobiri, Minister of State for Petroleum Resources (Oil), mentioned that President Tinubu has issued a definitive directive to both him and the NNPC GCEO, Mele Kyari to address the divestment issue between the two oil companies.
- He added that they are making every effort to resolve the situation as directed.
“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 stated.
- On decommissioning and abandonment in the oil industry, Lokpobiri noted that the ministry is addressing the matter in line with the Petroleum Industry Act (PIA) and global best practices.
“The reforms driven by the three Executive Orders will ensure that companies operating in Nigeria have the best environment to continue making their investments and that no company will seek to leave Nigeria,” the Minister added.
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, the Nigerian National Petroleum Corporation (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.
The successful acquisition would enable Seplat to boost its production by approximately 95,000 barrels of oil equivalent per day from the shallow-water assets previously managed by Exxon in partnership with NNPC.
