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HomeTop NewsSeplat Energy moves closer to finalizing $1.28 bln acquisition of ExxonMobil's Nigerian...

Seplat Energy moves closer to finalizing $1.28 bln acquisition of ExxonMobil’s Nigerian assets

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By Samuel Bankole

Seplat Energy is pushing for a swift conclusion to its $1.28 billion acquisition of ExxonMobil’s Nigerian shallow-water oil assets following the Nigerian National Petroleum Company Limited (NNPCL) halting its legal challenge to the deal.

The acquisition had faced delays due to regulatory issues and NNPCL’s claim of having the first right of refusal on the assets.

In a regulatory filing with the Nigerian Exchange (NGX) on Friday, Seplat Chief Executive Roger Brown noted the announcement on May 30, 2024, regarding a Settlement Agreement between NNPCL, ExxonMobil Corporation, and Mobil Producing Nigeria Unlimited (MPNU).

Seplat Energy confirmed that it has been notified of the termination of the court proceedings initiated by NNPCL against MPNU and its affiliates concerning the proposed divestment of MPNU’s shares to Seplat Energy Offshore Limited (SEOL).

“Seplat Energy commends the open cooperation and progress achieved by all stakeholders and will diligently engage all key stakeholders, including the government, in progressing towards a swift completion of the acquisition of MPNU,” Seplat stated in the filing.

Although an NNPC spokesperson could not provide an immediate comment, the legal team representing NNPC, Afe Babalola & Co., requested the High Court of the Federal Capital Territory in Abuja to pause the lawsuit and dismiss its legal objection to the acquisition deal.

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This move is part of a broader initiative to finalize a settlement agreement that involves transferring full ownership of MPNU to SEOL.

One prerequisite for this Settlement Agreement is the withdrawal of the lawsuit by the NNPC to enable the settlement.

Analysts believe that the Exxon-Seplat deal will inject much-needed capital into Nigeria’s oil industry, potentially leading to improved output.

The successful completion of this deal is expected to signal to investors that similar transactions, such as Shell’s asset sale to Renaissance in January, are likely to gain regulatory approval.

Nigeria, Africa’s largest oil producer, relies on crude oil for more than 90% of its foreign exchange and half of its budget. However, the country has faced declining oil output in recent years due to underinvestment and theft.

Oil majors operating in Nigeria, including Shell and TotalEnergies, have been exiting their onshore shallow water operations to focus on deepwater drilling operations.

The completion of the Exxon-Seplat deal is anticipated to be a positive development for Nigeria’s oil sector, showcasing the potential for successful regulatory navigation and attracting further investments.

(Edited by Oludare Mayowa; omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)

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