Seplat Energy Plc, a Nigerian and London-listed energy company, has reaffirmed its commitment to acquiring oil and gas assets from Exxon Mobil Corporation. The company’s Chief Executive Officer, Roger Brown, recently expressed his determination to complete the deal, which has faced significant delays for over a year. Bloomberg reported on Brown’s statement, shedding light on Seplat Energy’s optimism regarding Nigeria’s new President, Bola Ahmed Tinubu, and his potential to approach the transaction differently compared to his predecessor, Muhammadu Buhari. Notably, Buhari initially approved the deal but later reversed his decision.
Brown’s statement emphasizes Seplat Energy’s persistence in pursuing the acquisition and its expectation of a more favorable outcome under President Tinubu’s leadership. In an interview with Bloomberg, Brown stated, “We are still interested in the assets. We still like the company we’re buying. We think it’s a game-changing operation.”
The backstory to this ongoing acquisition effort began in February 2022 when Seplat Energy made a significant deal worth up to $1.6 billion to acquire Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil, a prominent US supermajor. The intended acquisition aimed to boost Seplat Energy’s production capacity to 146,000 barrels of oil equivalent per day (boepd) and increase its proven and probable liquids reserves from 241 million barrels to 650 million barrels.
Seplat’s acquisition note from February 25, 2022, outlined the assets included in the MPNU deal. These assets comprise a 40% operating ownership of 300 producing wells in four oil mining leases (OMLs 67, 68, 70, 104) alongside associated infrastructure. However, the Nigerian National Petroleum Corporation (NNPC) holds the remaining 60% partnership.
In addition to the operating ownership, the MPNU assets encompass a 51% interest in the Qua Iboe Terminal, ownership of the Bonny River Terminal, Natural Gas Liquids Recovery Plants at EAP and Oso, 409 million barrels of proven and probable liquid reserves (2P), and 211 billion standard cubic feet of proven and probable gas reserves (2P), with the undeveloped gas potential of 2,910 billion standard cubic feet (Bscf).
However, the acquisition process has faced obstacles. The Nigerian National Petroleum Company Limited (NNPCL) filed a lawsuit against the purchase, contending that it has the right to acquire the blocks itself from Exxon Mobil. Despite President Buhari’s initial approval on August 8, 2022, following the lawsuit, his decision was later reversed just two days later after an objection raised by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
Addressing the opposition and legal complications, Roger Brown clarified that Seplat Energy is acquiring a subsidiary rather than licenses. He explained, “What we are buying are shares sold by US companies, so that is a completely different animal because we are buying a company. Exxon’s read of the situation is the same.”
Bloomberg further reported on Brown’s perspective, highlighting the hidden value for Seplat Energy in the Exxon deal, particularly the natural gas reserves in the blocks. Seplat Energy already stands as one of the largest domestic suppliers of gas to Nigerian power plants. Brown indicated that it is likely that most of the gas in the licenses would be designated for export, either as a third-party source for Nigeria LNG Limited, an expanding venture facing a feedstock shortage, or through a separate floating production facility.
Seplat Energy Plc remains determined to overcome the challenges surrounding the acquisition of Exxon Mobil’s oil and gas assets. With the company’s ongoing interest and President
Tinubu’s assumed supportive approach, stakeholders eagerly await further developments in this game-changing operation.
