ExxonMobil explains divestment from downstream as shareholders react

ExxonMobil, an American multinational oil and gas corporation, has said that its divestment of 60 per cent stake in Mobil Oil Nigeria Plc, to Nipco Plc., would create opportunity for growth of the company’s brand.

But, shareholders expressed mixed feelings concerning the divestment by ExxonMobil, attributing the latest development to the series of challenges confronting the downstream sector.

Manager, Media and Communications, Oge Udeagha, told The Guardian that subject to regulatory approval, change-in-control is anticipated by mid-2017.
He assured that Mobil Oil Nigeria’s employees will continue to be employed following change-in-control.

Udeagha disclosed that Mobil Oil Nigeria is comprised of 250 company-owned and dealer-owned Mobil-branded retail stations, a fuels terminal and a lubricants plant in Apapa, and interests in two aviation fuel joint ventures in Lagos.

He said that the sale also includes an office building and residential real estate in Lagos currently leased by Mobil Producing Nigeria.

“We have also reached accompanying agreements for the continued import, blending and distribution of Mobil-branded lubricants and marketing of Mobil-branded fuel.

“These agreements will ensure the continued presence of the Mobil brand in Nigeria and position the brand for future growth”, he added.

He hinted that the Mobil Oil Nigeria Board, Ministry of Petroleum, Nigeria Stock Exchange and other relevant statutory agencies have been notified of the transaction.

This share-sale agreement, he noted, does not involve ExxonMobil’s upstream production operations in Nigeria or lubricant supply to Caterpillar dealer, Mantrac Nigeria.

Udeagha said ExxonMobil regularly evaluates its global portfolio of businesses and opportunities for growth, restructuring or divestment depending on fit with strategic business objectives.

The President, Rennaisance shareholders Association, Olufemi Timothy explained that the implication of the acquisition is that operators in the downstream sector is facing enormous challenges due to the nation’s macro economic concerns.

He pointed out that the action was a signal that Nigeria is currently loosing its foreign investment, noting that this would have a multiplier effect on the economy.

“The implication is that operators in the down stream sector can no longer survive which is not good for the economy and shareholders.