Seplat ‘confident’ Buhari will approve Mobil takeover before leaving office

Energy firm Seplat says it is pushing to conclude its bid to take over ExxonMobil’s shallow water business in Nigeria before the end of the current administration, and is confident President Muhammadu Buhari will approve the sale.

Mr Buhari will step down on May 29 after completing the legally allowed two terms of four years each. The Nigerian leader last year approved Seplat’s bid to buy Mobil Producing Nigeria Unlimited, a local unit of ExxonMobil, before rescinding his decision after the regulator opposed the bid.

No progress had been heard of the deal, worth $1.3 billion, since then.

“We are continuing to pursue the Presidential approval received on the 8 August 2022 for the MPNU acquisition and we remain focused on concluding the transaction within the remaining term of President Buhari before a new president is sworn into office at the end of May 2023,” Seplat’s chief executive Roger Brown said in the company’s 2022 report this week.

Separately in the same report, the company said: “However, the Sales & Purchase Agreement remains valid and we remain confident that the transaction will be approved. We continue to work with all parties to achieve a successful outcome and will provide further updates as appropriate.”

If successful, the purchase will scale Seplat’s production by 95,000 barrels of oil a day.

Regulatory matter

Seplat announced in early 2022 that it had entered into a landmark Sale and Purchase Agreement allowing it to acquire the entire share capital of Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation, Mobil Development Nigeria Inc, and Mobil Exploration Nigeria Inc.

The transaction failed after the state-owned NNPC asserted a right of first refusal on the deal as ExxonMobil’s joint venture partner. Mr Buhari, who appointed himself as petroleum minister, approved the sale to Seplat but later withdrew his support after the Nigerian Upstream Petroleum Regulatory Commission said the takeover was a regulatory matter and could not go through.

Presidential spokesperson Garba Shehu said at the time the earlier confusion was because “various agencies involved in (the) decision had not coordinated well among themselves.”

Dragging down

Seplat Energy reported a record revenue last year on high energy prices after oil and gas prices soared globally following Russia’s invasion of Ukraine.

It recorded N403 billion in revenue as against N293.6 billion the previous year; up 30%. But its profit fell 4.5% to N44 billion from N46 billion, dragging down its earnings per share from N97.63 to N45.

Seplat incurred higher cost of sales, general and administrative expenses with the later moving from N32 billion to N58 billion.

The firm, listed in Lagos and London, is offering a special dividend of US5.0 cents per share in addition to final dividend of US2.5 cents per share, totalling $44.1 million.