Key Points:
- Seplat Energy extends its $1.28-billion acquisition of ExxonMobil’s Nigerian assets due to legal and regulatory hurdles.
- Dispute between Seplat and NUPRC casts doubt on deal completion despite government support.
- Company reports record revenue and plans to expand gas production, showcasing its resilience despite acquisition delays.
Seplat Energy Plc, the energy conglomerate co-founded and partly owned by Nigerian energy tycoon Austin Avuru, has extended its $1.28-billion deal to acquire ExxonMobil’s stake in Mobil Producing Nigeria Unlimited (MPNU). The extension, announced on May 23, 2024, by Seplat CEO Roger Brown, aims to secure regulatory approvals and resolve outstanding legal disputes.
The company statement didn’t specify the extension’s duration but emphasized its commitment to closing the deal. It stated, “Seplat Energy…has extended the Share Sale and Purchase Agreement (SSPA) for the acquisition…in order to preserve the Transaction pending the resolution of certain legal proceedings and receipt of applicable regulatory approvals.”
The agreement’s terms remain unchanged from previous announcements (Feb. 25, 2022, and May 24, 2023). The headline consideration, effective date, and contingent payment structure are consistent and Seplat continues to engage stakeholders to expedite the transaction’s closure.
Nigerian oil deal in jeopardy
Former Nigerian President Muhammadu Buhari approved the acquisition in August 2022, but the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) challenged the decision. NUPRC argued that the approval violated the Petroleum Industry Act, which grants them sole authority over such transactions.
This dispute has created uncertainty around the deal. Despite the legal hurdles, President Bola Tinubu’s administration, in office since last May, supports the acquisition. However, investor confidence remains shaky due to ongoing legal and regulatory issues.
Seplat reports record revenue
Seplat, known for its focus on Nigeria’s Niger Delta oil and gas sector, has become the Nigerian Exchange’s largest listed energy group under the leadership of Austin Avuru and co-founder Ambrosie Orjiako.
The company reported record financial performance in 2023, exceeding $1 billion in revenue for the first time. Seplat plans to boost gas production by 390 million standard cubic feet per day (mmscf) by year-end, solidifying its domestic market position.
