The chief executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe has reiterated that the stalled Seplat-ExxonMobil Asset Sale Deal is more of a commercial issue and not regulatory.
However, he is said to be “very optimistic” that oil major Exxon Mobil’s asset sale to Seplat Energy can move forward when all the commercial issues are dealt with .
The regulator had last year disapproved the $1.28 billion sale, which some in the industry say is key to getting much-needed investment into Nigeria’s oil and gas sector.
“We are very optimistic that parties to the transaction will go back, look at the position of the regulator and come back by abiding by the provisions of Nigerian laws and the right thing will be done,” Komolafe, told Reuters on the sidelines of Africa Oil Week in Cape Town.
Komolafe said that Exxon “did not route the transaction” in line with the provisions of its joint operating agreement, but said that once Exxon had made proper agreements with its joint-venture partners in the assets, “the regulator will do what it needs to.”
Meanwhile, Seplat CEO Roger Brown said he was “hopeful” the deal could be concluded very soon.
“We have very good relationships with the regulator and that is why it takes time and the NNPC is a partner to us and we want to respect the partnership …Now we are starting to get to that crux point to try and resolve the issue,” he said.
The acquisition is key to actualising the most ambitious move ever by Seplat, which is both listed in London and Lagos, to scale output
Nigeria’s biggest energy company by market value Seplat is upbeat it will be able to finalise talks with parties that will allow it to advance to the decisive stage of the deal to purchase ExxonMobil’s offshore shallow water business.
The deal, which has ground to a halt for nearly two years, is expected to expand Seplat’s production by as much as 186 per cent.
Seplat opened talks in 2021 to buy Mobil Producing Nigeria Unlimited (MPNU), the local offshore shallow-water operation of Houston-based ExxonMobil for $1.3 billion. A contingent consideration of $300 million was also agreed at the time.
Owning the assets also entitles Seplat to run Qua Iboe Terminal, the export point of one of Nigeria’s top oil grades, produced from the nearby oilfields that ExxonMobil jointly operates with NNPC Limited.
Seplat has extended the share sale and purchase agreement to keep the deal alive until the legal battle is resolved and regulatory approvals are in the bag, its half-year earnings report stated.
The company’s shares have gained 67 per cent this year and are currently at their all-time high of N1,837 per unit with a combined valuation of N1.1 trillion.
Nigeria, relies on petroleum for 90 per cent of its foreign exchange, and half its budget. But production has declined in recent years due to years of underinvestment and theft. Several international oil majors are looking to sell onshore assets, but those deals have run into legal and regulatory hurdles.
Last month, NNPC said a subsidiary of Italy’s Eni did not obtain its consent prior to announcing a deal to sell onshore oil assets to local company Oando, a failure that it said could have breached terms of a joint operating agreement.
