The Nigerian National Petroleum Company Limited has announced the signing of a settlement agreement for the divestment of ExxonMobil’s stake in Mobil Producing Nigeria Unlimited (MPNU) to Seplat Energy Plc.
According to NNPC's statement released on Thursday, the agreement was signed in collaboration with MPNU, Mobil Development Nigeria Inc., and Mobil Exploration Nigeria Inc. The statement highlighted, “Settlement agreement between NNPC Ltd. and Mobil Producing Nigeria Unlimited, Mobil Development Nigeria Inc., and Mobil Exploration Nigeria Inc. signed regarding the proposed divestment of a 100% interest in Mobil Producing Nigeria Unlimited to Seplat Energy Offshore Limited.”
This development follows President Bola Tinubu's directive to the Ministry of State for Petroleum Resources (Oil) and NNPC on May 28 to resolve the long-standing divestment issue that had delayed the Seplat and ExxonMobil deal.
The transaction, which has been delayed for over two years, initially saw Seplat announcing an agreement in February 2022 to acquire ExxonMobil’s 40 percent stake in MPNU, with the expectation that the deal would close in the second half of that year. However, the Nigerian Upstream Petroleum Regulatory Company (NUPRC) declined to approve Seplat’s proposed acquisition on May 19, 2022, citing “overriding national interest.”
Further complicating the situation, NNPC secured a court injunction two months later, restraining ExxonMobil from selling its Nigerian assets. This legal action was followed by former President Muhammadu Buhari reversing his authorization for the acquisition on August 10, 2022, only days after initially granting approval.
Despite these setbacks, Seplat extended the share sale and purchase agreement (SSPA) with ExxonMobil in May 2023 amid ongoing efforts to secure the necessary approvals. On May 17, Seplat indicated that progress was being made with the acquisition of MPNU assets, subsequently extending the SSPA a week later.
With the recent signing of the settlement agreement, the divestment process appears to be moving forward, potentially bringing closure to a protracted and contentious transaction.
As a result of this transaction's conclusion, Nigeria could potentially increase its current daily crude oil production volume by at least 700,000 barrels per day (bpd), reaching about two million bpd before the end of the year.
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