Seplat finalises $800m acquisition of Mobil Unlimited from ExxonMobil

Firm urges end to gas flaring, advocates new approach to community engagement
Seplat Energy Plc has completed the $800 million acquisition of Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil

The acquisition positions Seplat as a key player in Nigeria’s energy sector, with plans to leverage the newly acquired assets for increased production and efficiency while contributing to the country’s prosperity.

The group made the announcement during a stakeholders’ engagement, yesterday, at the company’s headquarters in Lagos.

In another development, Kenyon International, an oil and gas servicing organisation in Africa, has called for the elimination of gas flaring in Nigeria and other oil-producing regions, emphasising the need for sustainable operations and improved community engagement.

As part of its short-term strategy, Seplat is also focusing on revitalising the over 400 idle wells out of more than 600, of which only 200 are producing. The company intends to implement a series of rigorous interventions to boost production levels and optimising its assets.

The $1.283 billion deal, which had been agreed since February 2022 but was delayed by regulatory hurdles, included up to $300 million in contingent payments spread over five years, along with standard adjustments, but was later adjusted to $800 million.

The acquisition of the entire issued share capital of MPNU adds the following assets to the Seplat Group: 40 per cent operated interest in OML 67, 68, 70 and 104; 40 per cent operated interest in the Qua Iboe export terminal and the Yoho FSO; 51 per cent operated interest in the Bonny River Terminal (‘BRT’) NGL recovery plant; 9.6 per cent participating interest in the Aneman-Kpono field; and approximately 1,000 staff and 500 contractors, who will transition to the Seplat Group.

The completion of the deal has given Seplat equity in 11 blocks (onshore and shallow water Nigeria); 48 producing oil and gas fields; five gas processing facilities; and three export terminals.

Chief Executive Officer of Seplat Energy Group, Roger Brown, appreciated President Bola Tinubu, the ministries and regulators for their support for the transaction.

On upstream investments, he stated that they plan to decarbonise operations while generating revenue for both Seplat and the government, which holds a 60 per cent stake.

Chief Operating Officer, Samson Ezugworie, highlighted the significance of the acquisition, describing it as a world-class asset in terms of its dimensions, opportunities, and value to the group.

He noted that, historically, the asset has produced nearly seven billion barrels of crude oil, and that assessments indicate that the volume and value of the reserves remaining in the ground were equivalent to what had already been extracted.

The Chief Financial Officer of Seplat Energy, Eleanor Adaralegbe, revealed that $800 million had already been paid for the deal. She stated that the payment was financed through a Revolving Credit Facility (RCF), demonstrating the company’s financial strategy and commitment to executing the transaction effectively.

The Director of Production for Seplat Energy, Ikay Ogunmwonyi, stated that the facility has a production capacity of 600,000 barrels of crude per day, but operating far below that capacity. He noted the significant amount of work underway to address the situation, as approximately 400 wells are not producing due to various challenges.

THE appeal, according to Kenyon, aligns with global efforts to mitigate environmental degradation and maximise the economic potential of associated gas resources.

The Chief Executive Officer (CEO), Kenyon International, Dr Victor Ekpenyong, made the call during a panel session at the Uganda International Oil and Gas Summit on the theme ‘Environmental Sustainability and Responsible Resource Management’.

He mentioned the need to phase out gas flaring, a prevalent environmental concern in many oil-producing regions, noting that it had long been a significant contributor to air pollution and climate change.

“The industry must prioritise the end of this practice, as it is not just an environmental issue; but also, an economic imperative that cannot be ignored. By adopting cleaner alternatives and investing in efficient technologies, I believe the oil and gas sector can lead the way in reducing its carbon footprint and mitigating the impact of global warming,” he said.

He also called for a different approach to address environmental sustainability and community engagement.

Ekpenyong urged industry stakeholders to consider the long-term environmental and social impacts of oil and gas production projects and called for immediate action on reducing harmful practices such as gas flaring, oil spills and habitat destruction.