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Seplat Energy reaffirms commitment to $1.3 billion ExxonMobil deal
Seplat Energy Plc, a Nigerian and London-listed energy company, has expressed continued interest in acquiring oil and gas assets from…
Seplat Energy Plc, a Nigerian and London-listed energy company, has expressed continued interest in acquiring oil and gas assets from Exxon Mobil Corporation.
The company’s Chief Executive Officer, Roger Brown, recently made a statement affirming their commitment to completing the deal that has faced delays for over a year, as reported by Bloomberg.
Seplat Energy Plc is hopeful that Nigeria’s new President, Bola Ahmed Tinubu, will treat the transaction differently than his predecessor, Muhammadu Buhari, according to a Bloomberg article. The deal had first received the former president’s approval, but he later changed his mind.
Brown’s statement highlights the company’s determination to proceed with the acquisition and its expectation of a more favourable outcome under President Tinubu’s leadership.
Brown told Bloomberg:
“We are still interested in the assets. We still like the company we’re buying. We think it’s a game-changing operation.”
Backstory
In February 2022, Seplat Energy made a deal to acquire Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil for up to $1.6 billion. The acquisition would increase Seplat’s production capacity and proven and probable liquid reserves.
MPNU assets include a 40% operating ownership of 300 producing wells in four oil mining leases, along with associated infrastructure. The Nigerian National Petroleum Corporation (NNPC) holds the remaining 60% partnership.
MPNU assets also include a 51% interest in the Qua Iboe Terminal, ownership of the Bonny River Terminal, Natural Gas Liquids Recovery Plants at EAP and Oso, 409 million barrels of proven and probable liquid reserves, and 211 billion standard cubic feet of proven and probable gas reserves.
Former President Buhari approved the acquisition on August 8, 2022, but reversed his decision two days later after an objection was raised by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
Buying a company, not a license
Bloomberg reports that the NNPCL rejected the sale and filed a lawsuit against Exxon Mobil on the grounds that it had the legal authority to buy the blocks directly from the US energy giant. Roger Brown, however, asserts that rather than buying licenses, his company is buying a subsidiary.
“What we are buying are shares sold by US companies, so that is a completely different animal because we are buying a company. Exxon’s read of the situation is the same.”
What you should know: According to Bloomberg, Brown also said that the natural gas in the blocks represents the deal’s hidden value for Seplat because the company is already one of the main local suppliers of gas to Nigerian power plants.
According to Brown, it is most likely that the majority of the gas included in the permits would be used for export, either through a separate floating production facility or as a third-party source for Nigeria LNG Limited, an expanding company that is short on feedstock.
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