NNPC Blocks Exxon Mobil’s Asset Sale To Seplat

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seplatThe Nigerian National Petroleum Company Limited has won a court decision temporarily blocking Exxon Mobil Corporation from selling assets in Nigeria to Seplat Energy Plc.

A judge in Abuja granted NNPC an “order of interim injunction” on July 6, 2022, barring Exxon “from completing any divestment” in a unit that ultimately operates four licenses in Nigeria, Blomberg reported on Monday.

The Lagos-based producer, Seplat, had agreed to acquire the United States oil major’s subsidiary for at least $1.28bn in February.

The report stated that NNPC wished to block the transaction and to take over the permits itself.

Bloomberg stated that NNPC sued Mobil Producing Nigeria Unlimited on July 5, 2022, asking the Federal High Court either to order that a dispute had occurred between the parties over preemption rights, or to order them to take the matter to arbitration, quoting a statement from Seplat.

Seplat, which was not party to the lawsuit, said its deal with Exxon was “still valid” and the company “remains confident that the matter will be brought to a proper conclusion in accordance with the law.”

A spokeswoman for Exxon declined to comment, according to Bloomberg, while a spokesman for the NNPC did not respond to a phone call and text message.

The acquisition would give Seplat additional production of about 95,000 barrels of oil equivalent a day from shallow-water assets that Exxon operated in a joint venture with NNPC.

For more than a decade, international oil companies active in Nigeria have been offloading large parts of their portfolio across the country to domestic players, a trend that has recently accelerated.

An order from a Nigerian court had also forced Shell Plc to pause its plans to sell all off its remaining onshore permits in Nigeria.

It also grew its revenue by 58.6 per cent to N100.6 billion, from N57.9 billion year-on-year, as its gross profit soared to N48.8 billion from N20.1 billion year-on-year, rising by 122.3 per cent.

Speaking to the shareholders, former Chairman of SEPLAT Energy, Dr. Bryan (ABC) Orjiako, said the company’s operational and financial performance in 2021 reflected the challenges of the business in Nigeria.

“Our average working interest production was 47,693 barrels of oil equivalent per day (boepd) including 29,091 boepd of liquids and 107.9 MMscfd of gas (18,602 boepd).”

According to him, SEPLAT’s robust operational performance, despite the operational challenges, meant that SEPLAT was able to meet its dividend commitment, “and with the Board having approved a Q4 dividend of $0.025 per share, we once again returned $0.10 per share to our shareholders for the 2021.”

He pointed out that since it raised $535million at its initial public offering in May 2014, the company had returned over $400million to shareholders in the form of dividends.

“The performance of our oil business was impacted by two lengthy shut-ins at one of the third-party operated export routes that we rely upon. This underscores the need for alternative export routes to mitigate this risk.

“We drilled five oil wells and three gas wells during the year. The oil wells have a combined gross potential of 17.5 kbopd and the gas wells have a combined gross rate of 130 MMscfd of gas and 5.2 kbopd of condensate. I am particularly proud of our strong safety record which saw us reach 24million hours without any Lost Time Injury (LTI) from our operating assets in 2021,” he said.

 


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