The Nigerian National Petroleum Company Limited (NNPC) has initiated a motion to discontinue its legal proceedings against several subsidiaries of Mobil Nigeria. This development is part of an ongoing effort to finalize a settlement agreement concerning the $1.28 billion asset divestment from Mobil Producing Nigeria Unlimited (MPNU) to Seplat Energy Offshore Limited.
The application, submitted by NNPC’s legal representatives, Afe Babalola & Co., on June 11, 2024, requests the court to grant leave for discontinuance and to strike out the suit, with a provision to relist it should the settlement process not succeed.
“The applicant humbly urges Your Lordship to grant leave to discontinue this suit and consequently strike it off the court’s cause list,” the motion stated.
This step follows the original lawsuit filed by NNPC in July 2022, which was referred to arbitration by the court on August 3, 2022.
In recent developments, significant pressure from President Bola Tinubu, following two high-level visits from ExxonMobil executives, facilitated the resolution of obstacles impeding the international oil company’s asset sale to Seplat Energy Plc.
A settlement agreement, signed by NNPC CEO Mele Kyari and MPNU Managing Director Shane Harris, outlines the following terms: “MPNU shareholders will consent to Seplat providing the Share Sale and Purchase Agreement to NNPC to finalize their transaction. NNPC will withdraw all interim orders and the substantive suit against MPNU and other defendants.”
The agreement further specifies that “the parties will jointly discontinue arbitration proceedings upon completion of the transaction. MPNU shareholders and NNPC will align their positions to finalize their respective transactions with Seplat.”
NNPC’s legal team emphasized that the discontinuance aligns with Order 24 of the High Court of the Federal Capital Territory Civil Procedure Rules 2018, and is crucial for completing the settlement. The court’s decision on this motion will be pivotal in resolving the longstanding dispute, allowing the parties to concentrate on finalizing the divestment.
This strategic move by NNPC is expected to pave the way for smoother completion of the transaction and foster better collaboration between the involved parties, thereby strengthening Nigeria’s oil and gas sector.
