Seplat Energy Plc remains committed to buying Nigerian oil and gas assets from Exxon Mobil Corp. through the realization of an agreement that the West African state maintains for more than a year.
The Lagos- and London-listed company hopes President Bola Tinubu, the new leader of Africa’s biggest crude producer, will take a different approach than his predecessor, who reversed an initial decision to approve the transaction.
“We’re still interested in the assets,” Seplat CEO Roger Brown said in an interview at the company’s U.K. offices. “We still like the company we’re buying. We think it’s a game-changing transaction.”
Under the deal filed in February 2022, Seplat agreed to pay $1.3 billion for an Exxon unit that owns a 40 percent operating stake in four shallow-water licenses in a purchase that would nearly quadruple production of oil from the independent company up to more than 130,000 barrels per day. . If the transaction goes ahead, it will be one of the largest divestments in Nigeria’s history since energy giants such as Shell Plc began offloading unwanted assets in the late 2000s.
Former President Muhammadu Buhari, who served as Nigeria’s oil minister, endorsed the sale in August before quickly backing down after the country’s energy regulator rejected his approval. Days before Buhari left office last month, Seplat announced it had extended the deal with Exxon to allow more time to complete the transaction.
State-owned Nigerian National Petroleum Co., which owns 60% of the permits, has opposed the sale and sued Exxon in the capital, Abuja, claiming it has the right to acquire the blocks in the northernmost – American
The Seplat boss disagrees with the NNPC because his firm is buying a subsidiary instead of licences. “What we’re buying are stocks sold by American companies, so it’s a whole different animal because we’re buying a company,” he said. “Exxon’s reading of the situation is the same.”
An Exxon spokeswoman declined to comment on the transaction, citing a court order and arbitration proceedings. Tinubu’s spokespeople did not respond to questions from Bloomberg News.
Promising signs
Early signs from the Tinubu administration look promising for supporters of the deal.
The new head of state met with Exxon executives during his second week in office, saying on Twitter that the invitation demonstrated his government’s “efforts to secure the cooperation of critical players in the oil sector.” . The advisers also prepared a report for the president before his inauguration recommending that he sell NNPC positions in joint ventures to minority stakes and “close” pending divestments to boost production.
The “hidden value” for Seplat in the Exxon deal is the natural gas from the blocks, according to Brown, whose firm is already one of the largest domestic suppliers of the fuel to Nigerian power plants.
Brown said it is “highly likely” most of the gas from the licenses will be destined for export, either as a third-party source for Nigeria LNG Ltd., an expanding company whose shareholders include Shell and NNPCs that do not have raw materials, or through an independent floating production facility.
