… deals await NUPRC Subject-to-Clearance Consent within 30 days

…  President Tinubu or Lokpobiri to give ministerial consent

Oredola Adeola

After over two years of delays, the Nigerian National Petroleum Company Limited (NNPC Ltd) has finally signed a settlement agreement with Mobil Producing Nigeria Unlimited, Mobil Development Nigeria Inc., and Mobil Exploration Nigeria Inc. resolving the long-standing compliance issues under Section 14 of the 2019 Joint Operating Agreement (JOA) contained in the Petroleum Industry Act (PIA).

This settlement was reached between the management of the two organizations on Thursday, thereby granting consent to the sale of ExxonMobil’s 40 percent stake in MPNU assets to Seplat Energy Plc for $1.3 billion.

Advisors Reports gathered that the agreement is expected to pave the way for the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to close the deal by granting the parties involved the Subject-to-Clearance Consent within 30 days.

The $1.3 billion deal between ExxonMobil and Seplat Energy involved the acquisition of a 40% stake in MPNU, which includes four oil mining licenses, more than 90 shallow-water and onshore platforms, and 300 producing wells.

However, the transaction has been delayed due to disputes between the parties and a court ruling that temporarily prevented ExxonMobil from selling its assets to Seplat Energy.

Seplat Energy confirmed that it signed a Sale and Purchase Agreement with ExxonMobil Corporation for the deal, subject to regulatory and ministerial approvals.

The NNPC Ltd, which has been the holder of the Federal Government equity interests in all the joint venture operations in Nigeria, including MPNU, triggered a dispute over the deal.

The national oil company argued that ExxonMobil was entitled to have been given the pre-emptive right-of-first-refusal to the sale of its shares in Nigeria, citing its long history of a joint partnership with MPNU.

It also claimed that the assets in Nigeria were among its prime targets in its planned takeovers and acquisitions following divestment plans by the International Oil Companies (IOCs) from Nigeria.

In May 2022, NUPRC received a letter from Seplat Energy confirming the ExxonMobil share sale deal, the Commission however declined the mandatory regulatory ministerial consent to formalize the deal in the overriding national interest. 

The NNPC then filed a case in the High Court of the Federal Capital Territory, Abuja, to stop ExxonMobil from going any further with the transaction.

The court in July 2022, granted an ex-parte order of interim injunction in favour of NNPC, restraining ExxonMobil and its shareholders from completing the Share Sale and Purchase Agreement previously signed with Seplat Energy.

This dispute has persisted for over two years, however in June 2023, ExxonMobil top officials led by Mr. Liam Mallon, President of ExxonMobil Upstream Company, visited President Bola Tinubu to discuss the deal, and the team also revisited the issue on Tuesday, May 28, 2024, when the paid another courtesy call on the President, to address other related matters.

In response to these visits, the President directed Senator Heineken Lokpobiri, Minister of State, Petroleum (Oil), to resolve the divestment issues between ExxonMobil and Seplat Energy and finalize the deal.