Key Points:
- Seplat Energy’s $1.28-billion acquisition with NNPC and ExxonMobil aims to boost Nigeria’s oil production by 700,000 bpd.
- Resolution of regulatory hurdles follows President Tinubu’s directive, emphasizing government commitment to Seplat-ExxonMobil deal.
- Seplat’s persistence through regulatory challenges underscores its strategic vision in becoming Nigeria’s leading energy conglomerate.
Seplat Energy Plc, the energy conglomerate co-founded and partly owned by Nigerian energy tycoon Austin Avuru, has finalized a $1.28-billion acquisition deal with Nigeria National Petroleum Company Limited (NNPCL) and American oil giant ExxonMobil.
The NNPCL announced on May 30, 2024, the formalization of an agreement that transfers ExxonMobil’s interests in Mobil Producing Nigeria Unlimited (MPNU) to Seplat Energy. This deal, which includes MPNU Mobil Development Nigeria Inc. and Mobil Exploration Nigeria Inc., is poised to significantly boost Nigeria’s crude oil production.
Regulatory approvals and production goals
Seplat Energy CEO Roger Brown confirmed earlier this month that the deal aims to increase Nigeria’s crude oil production by at least 700,000 barrels per day (bpd), potentially reaching approximately two million bpd by the end of the year. The agreement unveiled in February 2022, has faced regulatory and legal challenges over the past two years.
President Bola Tinubu recently directed the Ministry of State for Petroleum Resources and NNPCL to resolve the divestment issues hindering the Seplat-ExxonMobil deal. Minister of State for Petroleum Resources, Heineken Lokpobiri, highlighted the urgency of resolving these issues, noting that Nigeria has incurred a $34-billion loss over the past two and a half years due to decreased production from the ExxonMobil assets. Production from these assets plummeted from 600,000 bpd to 120,000 bpd, resulting in a significant shortfall.
Seplat’s strategic growth
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 Nigerian energy magnate Austin Avuru and co-founder Ambrosie Orjiako.
The energy group’s initial announcement of acquiring ExxonMobil’s 40 percent stake in MPNU in February 2022 faced regulatory blocks, including a court injunction by NNPC and intervention by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
Despite these setbacks, Seplat extended its share sale and purchase agreement with ExxonMobil in May 2023, demonstrating its commitment to finalizing the acquisition and boosting Nigeria’s oil production capacity.
