President Muhammadu Buhari, on Wednesday, reversed his authorisation of the acquisition of the entire share capital of Mobil Producing Nigeria Unlimited by Seplat Energy Offshore Limited.
The move puts the Presidency on the side of the Nigerian National Petroleum Company Limited which had earlier declined the $1.3bn transaction.
On Monday, a statement by the Special Adviser to the President on Media and Publicity, Femi Adesina, revealed that President Buhari consented to acquisition of Exxon Mobil shares by Seplat Energy Offshore Ltd.
“In his capacity as Minister of Petroleum Resources, and in consonance with the country’s drive for foreign direct investment in the energy sector, Muhammadu Buhari has consented to the acquisition of the entire share capital of Mobil Producing Nigeria Unlimited by Seplat Energy Offshore Limited,” the government said in a press statement.
According to the Presidency, Buhari authorised the move in his capacity as Minister of Petroleum as a way to attract Foreign Direct Investment to the country.
But giving an update on the issue, the Senior Special Assistant to the President on Media and Publicity, Garba Shehu, told correspondents that Buhari had reversed the decision and the previous misunderstanding was because the “agencies involved in (the) decision had not coordinated well among themselves.”
Earlier, Shehu, who spoke to an online publication, said the President’s reversal of his earlier approval was in line with the position of the Nigerian Upstream Petroleum Regulatory Commission.
According to him, the confusion over ExxonMobil shares was because “the various agencies involved in the decision had not coordinated well among themselves and having looked at all of the facts with all of the ramifications, the president decided the position of the regulator is to be supported.”
NUPRC had, in a statement over Buhari’s earlier approval of the assets acquisition, said, as the sole regulator, it is the one that could deal with such matters. It therefore said the status quo remained.
The state from the Chief Executive of the NUPRC Engr. Gbenga Komolafe, said the Commission, in line with the provisions of the Petroleum Industry Act 2021, was the sole regulator in dealing with such matters in the Nigerian upstream sector.
NUPRC said: “As it were, the issue at stake is purely a regulatory matter and the Commission had earlier communicated the decline of Ministerial assent to ExxonMobil in this regard. As such the Commission further affirms that the status quo remains.
“The Commission is committed to ensuring predictable and conducive regulatory environment at all times in the Nigerian upstream sector.”
Seplat Energy Plc had, last February, announced an agreement to acquire the entire share capital of Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation, Delaware, for $1.28bn.
The transaction involved the acquisition of ExxonMobil Nigeria’s entire offshore shallow water asset; an established, high-quality operation with a highly skilled local operating team and a track record of safe operations.
The NNPC Limited, however, has a pre-emptive right over the asset and had last month won a court decision temporarily blocking Exxon Mobil Corporation from selling assets in Nigeria to Seplat Energy Plc.
A Judge in Abuja had granted NNPC an “order of interim injunction” on July 6, 2022, barring Exxon Mobil “from completing any divestment” in a unit that ultimately operates four licenses in Nigeria.
The reversal of the approval comes not long after the government rejected the $1.58-billion deal on May 19, citing overriding national interests as one reason for the decision.
Exxon Mobil and Seplat were expected to carry out the operations of the unit’s oil-mining licenses to support Nigeria’s OPEC quota in the short term and to accelerate gas resource development and monetization to help bolster the Nigerian economy, according to the share sales agreement.
Seplat Energy is an independent oil and gas company with a strategic focus on Nigeria’s Niger Delta region. Orjiako and Austin Avuru, who founded the company in 2009, are credited with turning it into the largest listed energy group on the Nigerian Exchange.
ExxonMobil’s offshore shallow water business in Nigeria includes a well-established, high-quality operation able to produce 95,000 barrels of oil per day. Its acquisition by Seplat Energy will enhance the group’s ability to drive growth, profitability, and overall shareholder prosperity.
Seplat’s profit increased by 41 percent in the first half of 2022, from $56.57 million in the first half of 2021 to $79.8 million, as the company continues to leverage rising energy prices to build wealth for shareholders, following an $85.3-million loss in 2020.
IF the deal had succeeded, Seplat’s oil output would have increase by 186 percent, from 51,000 barrels per day to 146,000 barrels per day, while liquid and gas reserves will increase by 170 percent and 14 percent, respectively, to 650 million barrels and 1,712 billion standard cubic feet of gas.
Seplat Energy, on Thursday, said it had not received any official notification from the Federal Government reversing its proposed acquisition of the entire share capital of Mobil Producing Nigeria Unlimited.
The company also said it was seeking clarification from relevant authorities regarding the claims that the President Muhammadu Buhari, who doubles as Minister of Petroleum Resources, had withdrawn his ministerial approval for the deal.
“Seplat Energy has become aware of a news report claiming that ministerial approval of the company’s proposed acquisition of the entire share capital of Mobil Producing Nigeria Unlimited has been withdrawn,” the oil firm stated in a statement issued by its Chief Financial Officer, Emeka Onwuka.
It added, “Seplat Energy has received no official notification of such a decision and is seeking clarification from the relevant authorities.”
The move puts the Presidency on the side of the Nigerian National Petroleum Company Limited which had earlier declined the $1.3bn transaction.
Responding to claims on the reversal of ministerial approval, Seplat stated on Thursday that it had not received any official notification on the decision.
The oil firm, however, noted that it “will continue to work with all parties to achieve a successful outcome to the proposed acquisition and will provide an update in due course.”
It said the “announcement is made pursuant to Rule 17.10 of the Rulebook of the Nigerian Exchange, 2015 (Issuer’s Rule).”
