By: Amadi Vincent Uzoma
The Nigerian National Petroleum Company Limited on Thursday announced the signing of a settlement agreement facilitating the sale of ExxonMobil’s shares in Mobil Production Nigeria Unlimited (MPNU) to Seplat Energy Plc. This comes two years after the divestment plan was announced.
NNPC, in a statement, said the agreement involved MPNU, Mobil Development Nigeria Inc., and Mobil Exploration Nigeria Inc. “Settlement between NNPC Ltd.
and MPNU, Mobil Development Nigeria Inc., and Mobil Exploration Nigeria Inc. signed regarding the proposed transfer of 100% of MPNU’s shares to Seplat Energy Offshore Limited,” NNPC said. This development comes after President Bola Tinubu on May 28 ordered the State Department of Petroleum Resources (Petroleum) and NNPC Ltd. to resolve the divestment issue that has plagued the Seplat and ExxonMobil deal for more than two years.
Mr. Tinubu assured the ExxonMobil delegation that the Federal Government is committed to resolving the disinvestment issues between NNPCL and Seplat Energy.
Minister of State for Petroleum Resources (Petroleum), Heineken Lokpobiri, said the President had clearly asked him and NNPC Managing Director Mele Kyari to resolve the issue of disinvestment and they had tried their best to achieve it.
Mr. Lokpobiri had earlier revealed that Nigeria had lost $34 billion in the past two and a half years due to a decline in the production of assets that ExxonMobil is selling to Seplat Energy. He said assets had fallen from 600,000 barrels per day (bpd) to the current 120,000 bpd, leaving a deficit of 480,000 bpd. This equates to a loss of $34 billion at a conservative price of $80/barrel over the past two and a half years.
In February 2022, Seplat announced an agreement to acquire ExxonMobil’s 40% stake in MPNU, with the transaction expected to be completed in the second half of the year. In a move that sparked controversy in the industry, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) rejected the proposed acquisition of Seplat on May 19, 2022, citing “overriding national interests” as its rationale for preventing the deal from going through.
Two months later, Seplat reported that NNPC Ltd. had obtained a court order preventing ExxonMobil from selling its assets in Nigeria.
This opposition prompted the then President, Muhammadu Buhari, to rescind his initial authorization for the acquisition on August 10, 2022, immediately after approval. Amid delays in obtaining approval, Seplat extended the Share Purchase Agreement (SSPA) with ExxonMobil to acquire shares of MPNU on May 17, 2023 Seplat reported progress in acquiring MPNU’s assets and a week later the company renewed the SSPA.
With the recent signing of the settlement agreement, Nigeria could add at least 700,000 b/d to its current daily crude oil production volumes, reaching about two million b/d before the end of the year.
