Adedapo Adesanya
By Adedapo Adesanya
Seplat Energy Plc has disclosed that it remains committed to purchasing ExxonMobil’s Nigerian assets, with its sight set on completing the deal that the administration of former President Muhammadu Buhari halted.
The oil company hopes President Bola Tinubu, sworn in a month ago, will adopt a different approach than his predecessor, Mr Buhari, who reversed an initial decision to approve the transaction.
“We’re still interested in the assets,” Seplat Chief Executive Officer Roger Brown said in an interview at the firm’s UK offices. “We still like the company we’re buying. We think it’s a game-changing operation.”
Under the deal unveiled in February 2022, Seplat agreed to pay $1.3 billion for an Exxon unit that holds a 40 per cent operating stake in four shallow-water licenses in a purchase that would almost increase the independent company’s oil output to more than 130,000 barrels per day from less than 40,000 barrels per day.
Market analysts noted that if the transaction goes ahead, it will be one of the biggest divestments in Nigerian history since energy majors like Shell Plc started offloading unwanted assets in the late 2000s.
Former President Buhari endorsed the sale in August last year before swiftly going back on his words after the Nigerian National Petroleum Company (NNPC) Limited rejected his approval.
NNPC opposed the sale and sued Exxon in the capital, Abuja, claiming it had the right to acquire the blocks itself from the US major.
After much drama, last month, Seplat announced it had extended the agreement with Exxon to allow more time to finalize the transaction.
The Seplat boss disagrees with the NNPC because his firm is purchasing a subsidiary rather than licenses.
“What we are buying are shares sold by US companies, so that is a completely different animal because we’re buying a company,” he said. “Exxon’s read of the situation is the same.”
Following Mr Tinubu’s promise during his inauguration to make Nigeria more attractive to foreign investors, Seplat may see this pull through.
The new President earlier in June met Exxon executives saying that the invitation demonstrated his government’s “efforts to secure the collaboration of critical players in the oil sector.”
Seplat will be looking to tap into the natural gas in the blocks, according to Mr Brown, whose firm is already one of the largest domestic suppliers of the fuel to Nigerian power plants.
Mr Brown said it’s “most likely” that most of the gas in the licenses would be destined for export, either as a third-party source for Nigeria LNG Limited (NLNG) or via a separate floating production facility.
