UPDATED: Seplat strikes deal to acquire Exxon Mobil’s Nigerian unit

Seplat Energy has entered into a contract with a Nigerian unit of Texas-based supermajor Exxon Mobil, to procure Mobil Producing Nigeria Unlimited’s entire oil assets in Nigeria that date back to 1961 when the American firm first got the nod to prospect for oil in the country.

Under the contract terms, Seplat will buy out Exxon Mobil’s interests at $1.3 billion with a potential for $300 million premised on certain pre-agreed considerations, according to the regulatory filing seen by PREMIUM TIMES.

“The Transaction encompasses the acquisition of the entire offshore shallow water business of ExxonMobil in Nigeria,” the statement said, “which is an established, high-quality operation with a highly skilled local operating team and a track record of safe operations, producing 95 kboepd (W.I.) in 2020.”

Exxon Mobil, a member of the league of the world’s seven public energy companies commonly called Big Oil in industry parlance, runs another local subsidiary Esso Exploration and Production Nigeria Limited but has been intent on divesting its stake in a joint venture operated with state-owned Nigerian National Petroleum Corporation (NNPC).

The multinational holds 40 per cent in the partnership through MPNU and NNPC the remainder.

“This is a win-win for both companies. Together, we will strengthen our focus on profitability and cash generation to reinvest in Nigeria’s energy development,” Seplat’s chief Roger Brown said in respect of the newly announced deal with Exxon Mobil.

Shares in Seplat had gained 9.99 per cent on Lagos Custom Street at 10.45 WAT on Friday, following the news.

Nigeria’s slow energy transition and IOCs gradual exit

By degrees, international oil companies (IOCs) are scaling back investment in fossil fuels like petrol, while expanding their commitment to cleaner energy in line with a global roadmap aiming for net zero emissions by 2050.

That ambition needs about $4 billion annual commitment from energy companies until 2030 to be workable, said the International Energy Agency. Nigeria, which lags behind the curve of the transition, is steadily seeing a partial exit of the likes of Shell and Exxonmobil, who prefers to take the proceeds of their oil asset divestment to more favourable havens.

“ExxonMobil Nigeria has regular disposals of surplus materials and assets,” according to a snippet of news on the landing page of the company’s website.

Ben van Beurden, CEO of Royal Dutch Shell, told a gathering of investors last May Nigerian oil is out of tune with his company’s green energy plan.

Seplat, which has been the subject of the takeover talks since at least November, also has its eyes set on Shell’s estimated $4 billion stake in another joint venture involving NNPC, and could be in a pole position to beat competitors like Sahara Group and Tony Elumelu-backed Heirs Holdings to it, given its stature as Nigeria’s biggest oil & gas company by market value.