The federal government has finally approved ExxonMobil’s sale of its onshore assets to Seplat Energy, more than two years after the $1.28 billion deal was first agreed.
Gbenga Komolafe, chief executive officer of Nigerian Upstream Petroleum Regulatory Commission (NUPRC), said on Monday in Abuja that the deal was recommended by the regulator and had received ministerial approval, Reuters reported.
President Bola Tinubu, who doubles as the petroleum minister, said on Oct. 1 that the deal would receive ministerial approval in a matter of days after getting clearance from the regulator.
The sale had been under scrutiny as it awaited regulatory approval since it was first announced in February 2022. A similar sale of its onshore fields by Eni to Oando was approved earlier this year, while a planned sale of onshore shallow water operations by Shell to Renaissance Group was rejected.
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After lengthy delays, the regulator in early May signalled that approvals would be given to the oil majors for the companies to divest.
The NUPRC said companies had the option of faster approvals if they committed to clean-ups and compensating communities. The second long-term option involves waiting for NURPC to identify and assign all liabilities, delaying approvals.
President Bola Tinubu and his two junior petroleum ministers met Liam Mallon, ExxonMobil upstream president and Shane Harris, its Nigerian business’ managing director, on May 28.
Heineken Lokpobiri, junior minister for oil, later said “The president has given a clear directive to NNPC and me to resolve the issue of divestment, and we are doing whatever we can to achieve that.”
After the meeting, the Nigerian National Petroleum Company Limited (NNPC) withdrew its lawsuit against the sale, aiming to finalize a settlement agreement for the $1.28 billion divestment of assets from Mobil Producing Nigeria Unlimited (MPNU) to Seplat Energy Offshore Limited.
On June 11, Afe Babalola & Co., representing the NNPC, filed an application requesting a federal court to dismiss the lawsuit but asked to retain the option to reinstate it if settlement negotiations fail.
The lawsuit, initially filed in July 2022 and referred to arbitration on August 3, 2022, has been an obstacle to the transaction.
It was not immediately clear whether ExxonMobil met the conditions for cleaning up and compensating host communities for any environmental pollution.
A coalition of civil society groups previously met with the NUPRC and called on the government to halt the divestment process. They demanded a thorough audit of the companies and their activities before approvals were given.
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