The Nigerian government has approved the long-awaited sale of ExxonMobil’s onshore assets to Seplat Energy, finalizing a $1.28 billion deal that had been pending for over two years. Gbenga Komolafe, CEO of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), confirmed the approval on Monday in Abuja.
The sale, initially announced in February 2022, had faced regulatory hurdles, delaying its completion. However, President Bola Tinubu assured Nigerians earlier this month that the transaction would receive the necessary approvals, following clearance from the NUPRC.
President Tinubu emphasized the government’s commitment to fostering a free market while upholding strong regulatory standards. “Our administration is dedicated to promoting free enterprise and ensuring the integrity of regulatory processes in the upstream petroleum sector,” Tinubu stated. He added that the ExxonMobil-Seplat transaction would be approved promptly, alongside other divestment deals in the sector.
Background on the Deal
Seplat Energy Plc first announced its plans to acquire ExxonMobil’s onshore operations, specifically the shares of Mobil Producing Nigeria Unlimited, on February 25, 2022. The deal would enable Seplat to take over ExxonMobil’s shallow water operations in Nigeria. However, the transaction was met with challenges when the Nigerian National Petroleum Corporation (NNPC) exercised its Right of First Refusal (RFR) on the sale, as stipulated in the Joint Operating Agreement (JOA) of their Joint Venture (JV).
In May 2022, the federal government initially blocked the transaction, citing national interest concerns. Additionally, an Abuja court issued an injunction in July 2022, temporarily halting the sale of ExxonMobil’s assets. This legal roadblock further delayed the process.
By July 2024, the situation changed when the NNPC withdrew its lawsuit, allowing the sale to proceed in accordance with the Petroleum Industry Act (PIA). This marked a turning point in finalizing the transaction.
The Broader Context of Divestment in Nigeria
ExxonMobil is not the only international oil company (IOC) pursuing divestment strategies to reduce its involvement in Nigeria’s onshore oil and gas sector. Earlier in 2024, Shell Plc reached an agreement to sell its onshore assets to a local consortium for over $1.3 billion, although that sale is still awaiting final government approval. The consortium, Renaissance, includes ND Western, Aradel Energy, First E&P, Waltersmith, and Petrolin.
Similarly, TotalEnergies has also indicated its intention to divest its minority stake in a significant Nigerian onshore oil joint venture.
These moves by major IOCs highlight a broader shift toward offshore operations, as they seek to reduce their footprint in Nigeria’s onshore oil sector, citing challenges such as security concerns and operational risks.
With the approval of ExxonMobil’s asset sale to Seplat, the Nigerian government continues its push for investment and regulatory clarity in the upstream petroleum sector. The deal represents a significant milestone for Seplat, which has steadily expanded its presence in Nigeria’s energy industry.
