Energy giant, ExxonMobil, has said it hopes to get approval from the Nigerian government to sell its shallow water oil production assets to Seplat Energy soon.
ExxonMobil’s President of Global Upstream, Liam Mallon, disclosed this in a statement issued to Reuters ahead of the CERAWeek Energy Conference by S&P Global in Houston, USA. The conference begins today, March 6, and ends on March 10.
Despite the intended sale of the shallow water assets to an indigenous company, Seplat Energy ExxonMobil intends to keep its deep-water assets in Nigeria.
The backstory: In February 2022, Seplat Energy announced that it had entered into an agreement to acquire the entire share capital of Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation, Delaware, stating that the completion of the transaction would be subject to ministerial consent and other required regulatory approvals. However, in August 2022, the Federal Government of Nigeria put a stop to the deal.
Current realities: Over a year later, the deal between both companies is yet to pull through and the Buhari administration tenure will come to an end by May 29, 2023, and another administration will be sworn in.
On February 25, Nigeria conducted a highly controversial presidential election and the results of that election produced a pronounced president-elect, Bola Ahmed Tinubu. However, the election results are being challenged in the law court.
Whatever the case may be, Mallon told Reuters that ExxonMobil will maintain other assets in Nigeria going forward. According to Reuters, Mallon said the country remains a challenging place to work in and there is a clear commitment by ExxonMobil to stay in Nigeria through its deepwater operations. However, future investments will be subject to market conditions. He said:
- “We are not leaving. The deep water in Nigeria remains an attractive opportunity, but it has to compete with other opportunities around the world.”
Reuters reports that Nigeria’s Seplat Energy Plc has said it is working with the government to get the deal approved before Nigeria’s new president is sworn in by May 29, 2023.
What you should know: According to its website, Mobil Producing Nigeria Unlimited operates a joint venture (JV) with the Federal Government of Nigeria, through the Nigerian National Petroleum Company (NNPC) Limited.
The Federal Government has a 60% share, with the remaining 40% being MPN. The company and its joint venture partner, NNPCL, operate over 90 offshore platforms comprising about 300 producing wells at a capacity of over 550 thousand barrels a day of crude, condensate, and natural gas liquids.
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