Buhari shames NNPC, issues presidential fiat on Seplat-ExxonMobil deal

Oredola Adeola

President Muhammadu Buhari in a rare demonstration of his dual function as the country’s Minister for Petroleum Resources as well as the Executive President of Nigeria, weighed in decisively in favour of Seplat Energy concerning the purchase of Exxon Mobil Corp.’s equity interest in Mobil Producing Nigeria Unlimited,  thereby ending efforts by the Nigerian National Petroleum Company (NNPC) Limited to block the deal.

This was confirmed by Femi Adesina, Senior Special Assistant to the President on Monday.

The $1.28 billion transaction which was fully consummated by the parties( ExxonMobil and Seplat), was abruptly stalled by the NNPC, on grounds that it should have been allowed to exercise the right of first refusal.

The assets were jointly owned by ExxonMobil and NNPC under the country’s Joint Venture terms of trade

The decision clears the way for Seplat, a Nigerian independent oil, and gas company, through its wholly-owned subsidiary Seplat Energy Offshore Limited. to complete an agreement announced in February to acquire four permits from Exxon.

According to the statement President Buhari, who doubles as Petroleum Minister, in his capacity in that role granted ministerial approval to the deal.

Exxon and Seplat are expected to operate the unit’s oil licenses, supporting Nigeria to meet its OPEC production quota in the short term as well as accelerate the development of gas resources in the area.

Seplat Energy had in February announced the $1.28 billion deal.

Seplat said in February its offshore unit had entered an agreement to buy the entire share capital of Exxon’s Nigerian offshore shallow water business for $1.28 billion, plus a further consideration of up to $300 million based on the oil price and the average production of the unit, Mobil Producing Nigeria Unlimited, over a five-year period.

Seplat is listed on the London and Nigerian stock exchanges.

The Nigerian National Petroleum Company (NNPC) Limited had last Month claimed that it has got a court order blocking the sales of Exxon Mobil assets to Seplat Energy Plc because it wants to claim pre-emption rights over these assets and take over the permits itself.

NNPC claimed that the court decision temporarily blocked Exxon Mobil Corporation from selling its Nigerian assets to Seplat.

An Abuja Federal High Court Judge had on July 6, 2022, granted NNPC an order of interim injunction, barring Exxon Mobil from completing any divestment in a unit that ultimately operates 4 licenses in Nigeria.

It is however clear that the President’s Ministerial accent on the deal has finally put to rest the controversy over the deal.

The international business community’s reaction to the moves of the NNPC was one of disdainful disapproval. The assets are all located onshore and would serve to increase the country’s crude oil and gas production profile.

Seplat Energy, in a forward plan arrangement to develop the assets together with others, had embarked on the construction of the Amokpe Pipeline Infrastructure which was completed in about a week.

The intervention of President Muhammadu Buhari however , ought to have come earlier than now or soon after NNPC Limited was unveiled.