NNPCL, ExxonMobil sign $1.28b asset divestment deal

The Nigerian National Petroleum Company Limited (NNPC Ltd.) on Thursday announced the signing of a settlement agreement facilitating the divestment of ExxonMobil’s stake in Mobil Producing Nigeria Unlimited (MPNU) to Seplat Energy Plc.

This comes two years after the divestment plan was announced. The NNPC Ltd., in a statement, said the agreement involved MPNU, Mobil Development Nigeria Inc., and Mobil Exploration Nigeria Inc.

“Settlement agreement between NNPC Ltd. and MPNU, Mobil Development Nigeria Inc., and Mobil Exploration Nigeria Inc. signed regarding the proposed divestment of a 100 percent interest in MPNU to Seplat Energy Offshore Limited,” the NNPC stated.

This development follows a directive from President Bola Tinubu to the Ministry of State for Petroleum Resources (Oil) and NNPC Ltd. on May 28, to resolve the divestment issue that stalled the Seplat and ExxonMobil deal over two years.

Tinubu assured the ExxonMobil delegation that the Federal Government was committed to resolving the divestment issues between NNPC Ltd. and Seplat Energy.

Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, said the President had given a clear directive to him and the NNPC Ltd. Group Chief Executive Officer, Mal Mele Kyari, to resolve the issue of divestment, which they were doing their best to achieve.

Lokpobiri earlier revealed that Nigeria lost 34 billion dollars in the last two and a half years due to the fall in production from the assets being divested by ExxonMobil to Seplat Energy. He said the assets declined from 600,000 barrels per day (bpd) to the current 120,000 bpd, leaving a shortfall of 480,000 bpd. This, he said, amounted to a 34 billion dollar loss at a conservative 80 dollars per barrel in the last two and a half years.

In February 2022, Seplat announced an agreement to acquire ExxonMobil’s 40 percent stake in MPNU, expecting the transaction to be completed in the second half of the year. However, on May 19, 2022, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) declined to approve Seplat’s proposed acquisition, citing “overriding national interest.”

Two months later, Seplat reported that NNPC Ltd. had secured a court injunction preventing ExxonMobil from selling its assets in Nigeria. This opposition led former President Muhammadu Buhari to reverse his initial authorization for the acquisition on August 10, 2022, shortly after granting approval.

Amid the delay in securing approval, Seplat extended the Share Sale and Purchase Agreement (SSPA) with ExxonMobil for the acquisition of its stake in MPNU in May 2023. On May 17, Seplat indicated progress in acquiring MPNU assets, and a week later, the company extended the SSPA again.

With the recent signing of the settlement agreement, Nigeria could add at least 700,000 bpd to its current daily crude oil production volume, hitting about two million bpd before the end of the year.