Nigerian Gov’t Stops Seplat Energy, ExxonMobil’s $1.28 billion Oil Deal

Seplat Energy Plc’s plan to acquire ExxonMobil’s shallow water business in Nigeria, Mobil Producing Nigeria Unlimited (MPNU), has hit the rock following a lawsuit filed by the Nigerian National Petroleum Company (NNPC) Limited.

The domestic oil and gas company had announced in February 2022 that ExxonMobil had agreed to sell its stake in the oilfield to Seplat, however, NNPC, which jointly owned the oil asset rejected the deal.

In a bid to stop the acquisition, NNPC, representing the Nigerian government, approached the court to receive a restraining order against Seplat and ExxonMobil, that will prevent both parties from transferring the asset.

There are reports that the NNPC wants the stake to itself, and it’s taking advantage of its first refusal option as a joint owner of the asset. This mean before the asset is transferred, the government agency has the right to prevent it, and make a counter offer to takeover the stake.

Aside from the attempt to takeover the asset, reports also have it that the NNPC is planning to implement the decommission policy that mandates oil companies exiting an oilfield, to clean it up, and leave it in the state that the firm acquired it – a process that is time and capital consuming.

Prior to the NNPC faceoff, Seplat was awaiting ministerial consent and other required regulatory approvals to proceed in the takeover of the asset.

But the deal worth $1.28 billion plus up to $300 million contingent consideration, has now hit a snag, with the Federal High Court in Abuja, in suit no: FCT/HC/BW/CV/173/22 m/203/2022, filed on July 5, restrained Seplat and ExxonMobil from carrying out the acquisition.

This means sale, trade, allocation, transfer, or disposal of the shares relating to the oilfield asset has been put on hold, dashing the hope of Seplat, as the firm had expected to increase its revenue sources with the shallow-water assets.

The court, which was presided by Justice B. Belgore, restrains the “sale of assets covered in Oil Mining Lease 68, Oil Mining Lease 69, Oil Mining Lease 70 and Oil Prospecting Licence 94, to anybody, person (s), company, consortium or entity howsoever described pending the determination of the claimant/applicant’s motion filed on the 5th of July or when the judicial tribunal is duly constituted and can make interim preservation orders.”