After weeks of criticisms, President Bola Tinubu has announced that the $1.3 billion ExxonMobil-Seplat divestment has been approved by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and will be completed in a matter of days.
In his Independence broadcast on Tuesday, President Tinubu noted that the ExxonMobil-Seplat deal was approved in line with the Petroleum Industry Act (PIA).
“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,” Mr Tinubu said.
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“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,” he noted.
President Tinubu was heavily criticised when the NUPRC approved Oando’s 100 percent acqusition of the shares of Nigerian Agip Oil Company in July 2024.
While Oando’s deal, owned by the president nephew, Mr Wale Tinubu, was speedily approved, important deals such as the ExxonMobil-Seplat divestment and Renaissance’s acqusition of Shell’s assets were stalled.
By implication, the NUPRC approved Oando Plc’s acquisition of Eni’s 100 per cent stake in the Nigerian Agip Oil Company Limited (NAOC Ltd) within 18 months while ignoring the Exxon-Mobil deal for over two years.
In February 2022, Seplat Energy agreed to acquire Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil for $1.3 billion.
However, the Nigerian National Petroleum Company (NNPC) Limited blocked the deal, filing a lawsuit filed on July 5, 2022. The deal was subsequently referred to arbitration by the court on August 3, 2022.
The interesting part of the entire drama came on August 8, 2022, when former President Muhammadu Buhari approved the ExxonMobil-Seplat deal.
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“In his capacity as Minister of Petroleum Resources, and in consonance with the country’s drive for Foreign Direct Investment in the energy sector, President @MBuhari has consented to the acquisition of the entire share capital of Mobil Producing Nigeria Unlimited by Seplat Energy Offshore Limited,” the Presidency said on a tweet,
“Exxon Mobil had entered into a landmark Sale & Purchase Agreement with Seplat Energy to acquire the entire share capital of Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation, Mobil Development Nigeria Inc, & Mobil Exploration Nigeria Inc, registered in Delaware, USA.
“Considering the extensive benefits of the transaction to the Nigerian Energy sector and the larger economy, President @MBuhari has given Ministerial Consent to the deal.”
However, the NUPRC did not honour the Nigerian president’s approval of the ExxonMobil-Seplat deal.
Rennaisance acqusition of Shell assets rejected
In January, Shell reached an agreement to divest its onshore business in Nigeria to Renaissance in a deal valued at $2.4 billion. Renaissance consortium comprises ND Western, Aradel Energy, First E&P, Waltersmith, all local oil exploration and production companies, and Petrolin, a Swiss-based trading and investment company.
The joint venture (JV) comprises 18 oil mining leases for onshore and shallow water petroleum operations in Nigeria. Shell’s 25.6 percent interest in NLNG is not included in this transaction.
Shell’s three businesses would remain outside the scope of the deal. These include: Shell Nigeria Exploration and Production Company, which operates in the deepwater Gulf of Guinea; Shell Nigeria Gas, which supplies gas to local industries and commercial customers; and Daystar Power Group, which is engaged in offering solar power solutions across West Africa.
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In August 2024, BusinessDay reported that the NUPRC had rejected Shell International Plc’s bid to sell its onshore assets to Renaissance. Nothing significant has been heard since then.
“ExxonMobil-Seplat deal is expected to attract huge tax revenues to the Nigerian government. Seplat pays over $1 billion in royalties, taxes, and levies to the Niger Delta Development Commission (NDDC) and the state governments. The deal is also expected to provide more jobs and development,” said an oil and gas expert, who pleaded anonymity, because of his interest in the deal.