Nigeria Govt Approves $1.28bn Seplat-ExxonMobil Deal 2 Years After

Nigerian government has approved the sale of Exxon Mobil’s onshore assets to Seplat Energy, more than two years after the $1.28 billion deal was struck by the two energy firms.

Chief executive officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, confirmed the approval on Monday, 21 October during the Commission’s third anniversary event in Abuja.

This comes three weeks after President Bola Tinubu assured that the final approval would be granted soon, following clearance from the regulatory body.

Since it was first announced in February 2022, the deal has faced prolonged regulatory delay.

As part of the agreement, Seplat would acquire 51% of the Bonny River natural gas liquids recovery plant, which was previously controlled by Mobil Producing Nigeria Unlimited, Exxon’s local subsidiary, and 40% of four oil mining leases and related infrastructure, including the Qua Iboe export terminal.

Reacting to the announcement, ExxonMobil said in a statement: “We welcome the regulator’s announcement and look forward to formally receiving the ministerial consent as we work toward the conclusion of the sale.”

With the approval of the deal, ExxonMobil has joined other multinational oil companies that have been pushing to exit from onshore oil exploration in Nigeria.

The upstream regulator had in July approved the sale of onshore assets by Eni’s local firm, AGIP, to Oando.

READ ALSO: ExxonMobil, Seplat $1.28bn Divestment Deal Will Be Approved Soon – Tinubu

While the oil majors seek to sell off their onshore oil assets currently hampered by theft and sabotage, to focus on offshore investments, environmental experts and other stakeholders have raised concerns about the need for them to take responsibility for oil spill and other environmental impacts of their activities in the past.

In May, the NUPRC offered oil majors expedited clearances for planned asset sales if they assumed responsibility for oil spills and provided compensation to affected communities instead of waiting for authorities to determine liability.

While the Nigerian upstream regulator announced ministerial approval for Seplat-ExxonMobil deal, that of Shell was declined.

Shell had in January announced its decision to sell onshore asset for up to $2.4 billion to Renaissance consortium, comprising five companies.

Komolafe simply said the Shell deal “could not scale (the) regulatory test.”

He however did not give reasons the government is yet to approve deal.