The government of Nigeria has approved the acquisition of ExxonMobil’s US$1.3bn shallow water oil blocks by Nigerian independent oil and gas company Seplat Energy.
The acquisition will give Seplat Energy an additional 95 kboe/d of production from the shallow water permits that ExxonMobil operates in a joint venture with Nigeria’s national oil company NNPC. For Exxon, the sale marks its exit from onshore and shallow water activities in Nigeria.
In February 2021, Seplat Energy had agreed to acquire the entire share capital of Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil for US$1.3bn. However, in May 2022, the federal government declined to consent to the proposed acquisition due to “overriding national interest”, as NNPC intended to exercise a right of pre-emption on ExxonMobil’s planned sale of the MPNU assets in Nigeria. Seplat Energy, for its part, maintained that its deal with ExxonMobil was valid.
The approval of the government therefore marks a shift in favor of Seplat Energy’s claims. However, just after the announcement was made, Nigeria’s oil regulator, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), decided to overrule the government’s decision, saying that the transaction was purely a regulatory matter.
Crude oil production in Nigeria decreased by 11% in 2021 to 1,7 mboe/d. The country remains Africa’s first oil producer before Libya, Algeria and Angola.