ExxonMobil’s $1.52 billion sale of a swathe of Nigerian offshore assets to London-listed independent Seplat Energy has finally been ratified by President Muhammadu Buhari, marking a breakthrough for a deal that appeared set to be ensnared in disputes and court proceedings.
This transaction, announced in February this year, was set to follow the well-trodden path of other oil and gas deals in Nigeria which have been subject to lengthy delays – and are sometimes not completed at all – due to the highly litigious nature of Nigeria’s business environment..
Metrobusinessnews.com reports that besides acting in his capacity as the substantive minister of Petroleum resources, the compelling need for the country’s Foreign Direct Investments, (FDIs) was majorly responsible for the approval.
Federal government had turned down the application for ministerial consent necessary to seal the $1.5bn planned deal between Seplat Energy Plc, a major energy company in Nigeria, and US-based ExxonMobil.
The CEO of Nigerian Upstream Regulatory Commission (NUPRC), Gbenga Komolafe had adduced government’s initial rejection of the deal citing overriding national interest, failure to follow due process and inappropriate application as major reasons for rejecting a deal that could deliver higher taxes, increased production, and generate more oil revenue to Africa’s biggest oil producing country.
But, Femi Adesina, Special Adviser to the President on media and publicity said in a statement that “Exxon Mobil had entered into a landmark Sale and Purchase Agreement with Seplat Energy to acquire the entire share capital of Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation, Mobil Development Nigeria Inc, and Mobil Exploration Nigeria Inc, both registered in Delaware, USA.”
“Considering the extensive benefits of the transaction to the Nigerian Energy sector and the larger economy, President Buhari has given Ministerial Consent to the deal.”
“The President, in commitment to investment drive in light of the Petroleum Industry Act, granted consent to the Share Sales Agreement, as requested by the parties to the transaction, and directed that the approval be conveyed to all the parties involved. “
“Exxon Mobil/Seplat are expected to carry out operatorship of all the oil mining licenses in the related shallow water assets towards production optimization to support Nigeria’s OPEC quota in the short term as well as ensure accelerated development and monetization of the gas resources in the assets for the Nigerian economy.
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President Buhari also directed that Exxon Mobil and Seplat adequately mitigate all environmental and abandonment liabilities.”
The analysts have lauded the positive disposition of the President saying that this will engender confidence in the local operators as major international oil companies continue with sales of thrir assets in the country.