Regulator hints Seplat buy of Mobil Nigeria to move forward

The Nigerian Upstream Petroleum Regulatory Commission says it is hopeful that the stalled $1.28 billion sale of ExxonMobil’s shallow water business to Seplat Energy will move forward.

Last year, the petroleum upstream regulator rejected Seplat’s move to buy Mobil Producing Nigeria Unlimited, a local unit of ExxonMobil, as the state-oil company NNPC argued it had the right of first refusal over the asset.

“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,” Gbenga Komolafe, the CEO of NUPRC, told Reuters during the Africa Oil Week conference in Cape Town.

He said once Exxon had reached appropriate agreements with its joint-venture partners for these assets, the regulatory process would proceed.

Seplat CEO Roger Brown shared his hope that the deal could be successfully concluded this year, citing the positive relationship they maintain with the regulator and the partnership with the Nigerian National Petroleum Corporation (NNPC).

“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,” Mr Brown said.

ExxonMobil did not comment on the situation, according to Reuters.

IOCs selling assets

The major roadblock to this asset sale has been opposition from Nigeria’s state oil company NNPC, which has asserted its pre-emptive rights to these assets. NNPC has not yet publicly revealed whether it has extended an offer to purchase the assets.

Nigeria, the largest oil exporter in Africa, heavily relies on petroleum, accounting for 90% of its foreign exchange and half of its budget.

Nevertheless, the nation has seen a decline in oil production in recent years due to underinvestment and theft, leading several international oil majors to seek the sale of onshore assets. These sales have consistently encountered legal and regulatory obstacles.

Just last month, NNPC said that a subsidiary of Italy’s Eni did not seek its consent before announcing a deal to sell onshore oil assets to Oando. This oversight may have breached the terms of a joint operating agreement, according to NNPC.