Seplat, co-founded by Austin Avuru, nears completion of $1.3-billion ExxonMobil deal

Omokolade Ajayi -
Key Points
  • Seplat Energy is set to finalize its $1.3-billion acquisition of ExxonMobil’s Nigerian assets, following President Bola Tinubu’s approval announcement on Independence Day.
  • The ExxonMobil deal, first initiated in 2022, faced delays due to regulatory and legal hurdles but is now expected to close within days.
  • Seplat Energy posted a $42.89-million net profit in H1 2024 and increased its dividend payout to 80%, despite production challenges.

Seplat Energy, the energy group co-founded and partly owned by Nigerian energy tycoon Austin Avuru, is on the cusp of finalizing its long-awaited acquisition of ExxonMobil Corp.’s Nigerian assets after overcoming regulatory and legal hurdles.

Seplat's ExxonMobil deal gets green light

The $1.3-billion transaction, initiated in 2022, had faced delays due to Nigeria’s stringent legal landscape and approval bottlenecks. A pivotal announcement came on Nigeria’s Independence Day when President Bola Tinubu confirmed the federal government’s readiness to approve ExxonMobil’s sale of its oil and gas operations to Seplat. 

“The divestment will receive ministerial approval in a matter of days,” Tinubu said, emphasizing the deal’s potential to increase national oil and gas production. He further outlined its expected positive impact on the Nigerian economy, especially as the country struggles to meet its OPEC production targets amid years of underinvestment in its oil industry.

The acquisition centers on ExxonMobil’s stake in Mobil Producing Nigeria Unlimited (MPNU), a key player in the nation’s upstream oil sector. Seplat Energy had extended the deal as of May 2024 to allow time for regulatory approvals and the settlement of legal disputes, as revealed by CEO Roger Brown.

Seplat Energy’s strategic growth moves

Co-founded by Nigerian energy magnates Austin Avuru and Ambrosie Orjiako, Seplat Energy has established itself as a dominant force in Nigeria’s energy landscape. Despite a 4.7-percent decline in average daily production, the company has maintained resilience through sound financial management and strategic expansion efforts.

Seplat posted a net profit of $42.89 million for the first half of 2024, a notable achievement against operational challenges. The company also increased its dividend payout ratio to 80 percent, up from 51.4 percent in the same period last year.

The planned acquisition marks a crucial moment for Seplat Energy and could further strengthen its position as Nigeria’s largest listed energy company. The boost in production and potential for increased revenue from ExxonMobil’s assets could significantly shape the company’s future growth trajectory while contributing to stabilizing Nigeria’s critical oil sector.