By Adedapo Adesanya
Nigeria has finally approved the sale of Exxon Mobil Corporation’s onshore oil and gas assets to local energy firm Seplat Energy Plc.
The decisions end a more than two-year delay to the conclusion of Exxon’s $1.3 billion deal, which was halted by the administration of former president, Mr Muhammadu Buhari.
President Bola Tinubu, granted ministerial approval for this agreement along with three others, according to Mr Gbenga Komolafe, the chief executive officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) on Monday.
President Tinubu doubles as Nigeria’s minister of petroleum, a trend that was continued by Mr Buhari, his predecessor.
Speaking in Abuja, Mr Komolafe announced that the ministerial approval has been secured.
It was revealed that under the agreement, Seplat will acquire a 40 per cent interest in four oil mining leases and the related infrastructure, which includes the Qua Iboe export terminal.
Additionally, Seplat will hold a 51 per cent stake in the Bonny River natural gas liquids recovery plant that was formerly operated by Mobil Producing Nigeria Unlimited, the local division of Exxon.
President Tinubu during his Independence Day message earlier this month announced that the deal would be approved soon.
“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. The move will create vibrancy and increase oil and gas production, positively impacting our economy,” he said.
In February 2022, Seplat agreed to pay $1.3 billion for the Exxon unit that holds a 40 per cent operating stake in four shallow-water licenses in a purchase that would almost increase the independent company’s oil output to more than 130,000 barrels per day from less than 40,000 barrels per day.
Market analysts noted that it will be one of the biggest divestments in Nigerian history since energy majors like Shell Plc started offloading unwanted assets in the late 2000s.
Mr Buhari endorsed the sale in August 2022 before swiftly going back on his words after the Nigerian National Petroleum Company (NNPC) Limited rejected his approval.
The state oil firm opposed the sale and sued Exxon in the capital, Abuja, claiming it had the right to acquire the blocks itself from the US oil major.
Seplat announced it had extended the agreement with Exxon to allow more time to finalise the transaction in May 2023, the same month that President Tinubu took office.