Transaction with ExxonMobil still valid – Seplat debunks NNPC’s RFR rumour

Solomon Ezeme

Seplat Energy has debunked the rumour that the Nigerian National Petroleum Company (NNPC) Limited had opted to exercise its Right of First Refusal (RFR) on its planned acquisition of the entire share capital of Mobil Producing Nigeria Unlimited (“MPNU”) from Exxon Mobil Corporation, Delaware (“ExxonMobil”).

The Management of the company, in a statement issued on Tuesday, emphasized that, contrary to misinformation in the public, the Sale and Purchase Agreement(SPA) that it had earlier announced on February 25, 2022 with Exxon Mobil, ‘remains valid and subsisting’.

EnergyDay had earlier reported that the Seplat Energy Offshore Limited, a wholly owned Nigerian subsidiary of Seplat Energy Plc, entered into the Sale and Purchase Agreement(SPA) to acquire the entire share capital of MPNU for a purchase price of $1,283 million plus up to $300 million contingent consideration, subject to lock-box, working capital and other adjustments at closing relative to the effective date.

EnergyDay further gathered that the transaction encompasses the acquisition of the entire offshore shallow water business of ExxonMobil in Nigeria, which is an established, high-quality operation with a highly skilled local operating team and a track record of safe operations, producing 95 thousand barrels of oil equivalent per day (kboepd) in 2020 (92% liquids).

The company therefore clarified that MPNU is not a party to the stated sales agreement and still retains its interests, rights and obligations under the NNPC/MPNU JOA (Joint Operating Agreement).

“Seplat Energy has become aware of newspaper and social media reports that the Nigerian National Petroleum Company Limited (“NNPC”) has exercised a right of pre-emption under the NNPC/Mobil Producing Nigeria Unlimited (“MPNU”) Joint Operating Agreement (“JOA”).

“The Company wishes to clarify that the Sale and Purchase Agreement (“SPA”), earlier announced on the 25 February 2022, deals with the acquisition of the entire share capital of MPNU’s shareholders, Mobil Development Nigeria Inc. and Mobil Exploration Nigeria Inc., being entities of Exxon Mobil Corporation registered in Delaware (“ExxonMobil”). MPNU, is not a party to the SPA and continues to hold its interests, rights and obligations under the NNPC/MPNU JOA.

“There are also some reports that the SPA between ExxonMobil and Seplat Energy has been terminated. Seplat Energy confirms that no event of termination has occurred, and the SPA remains valid and subsisting.

“Seplat Energy is a compliant company and will continue to follow the laws of the Federal Republic of Nigeria. This announcement is made pursuant to Rule 17.10 of the Rulebook of the Nigerian Exchange, 2015 (Issuer’s Rule).”

Toyin Akinosho, Publisher of the magazine, in his reaction to the ensuing controversy accused the NNPC of taking over many oil and gas assets in the country and trying to “gift” the assets of ExxonMobil to an unknown third party who are usually incompetent, by preventing the Seplat/ExxonMobil deal from scaling through.

“NNPC is in JV arrangements with multinational companies that produce at least 45 per cent of our crude. That’s a lot of material for them already. The assets they operate are the least optimised of all the assets in the industry.

“It would not manage the assets efficiently, so any excuse about ‘this being taken over in the interest of the state’ is untrue. In the last three years, it has implemented Finance and Technical Service Agreements (FTSAs), with less than impressive results,” Akinosho concluded.