Following a two-year delay, NNPC signs the settlement agreement for ExxonMobil’s divestment to Seplat Energy

NNPC has disclosed that ExxonMobil has signed a settlement agreement to sell Seplat Energy its MPNU interest.

The Nigerian National Petroleum Company Limited has declared the signature of a settlement agreement with Seplat Energy Plc over ExxonMobil’s disposal of its interest in Mobil Producing Nigeria Unlimited (MPNU).

The agreement was inked in cooperation with MPNU, Mobil Development Nigeria Inc., and Mobil Exploration Nigeria Inc., according to a statement issued by NNPC on Thursday. The announcement said, “A settlement agreement regarding the proposed divestment of a 100% interest in Mobil Producing Nigeria Unlimited to Seplat Energy Offshore Limited was signed by NNPC Ltd. and Mobil Producing Nigeria Unlimited, Mobil Development Nigeria Inc., and Mobil Exploration Nigeria Inc.”

This progress follows President Bola Tinubu’s directive on May 28 to the Ministry of State for Petroleum Resources (Oil) and NNPC to settle the protracted divestment dispute that had caused the Seplat and ExxonMobil transaction to be postponed.

Seplat first announced an agreement in February 2022 to purchase ExxonMobil’s 40% investment in MPNU, with the assumption that the deal would close in the second half of that same year. However, the transaction has been beset by delays for more than two years. With reference to the “overriding national interest,” the Nigerian Upstream Petroleum Regulatory Company (NUPRC) refused to authorize Seplat’s proposed acquisition on May 19, 2022.

Two months later, NNPC obtained a court injunction prohibiting ExxonMobil from selling its Nigerian assets, further compounding the problem. Only a few days after initially giving consent, on August 10, 2022, former President Muhammadu Buhari reversed his authorization for the acquisition in response to this legal action.

In May 2023, Seplat extended the share sale and purchase agreement (SSPA) with ExxonMobil in spite of these difficulties while continuing to pursue the required permissions. Seplat extended the SSPA a week after indicating on May 17 that progress was being made with the acquisition of MPNU assets.

The divestment process seems to be proceeding with the recent signing of the settlement agreement, which could put an end to a drawn-out and controversial deal.

Nigeria might increase its current daily crude oil production volume by at least 700,000 barrels per day (bpd) when this agreement is completed, reaching almost two million bpd before the end of the year.