ABUJA - The Nigerian government is making strides towards resolving a complex dispute over the sale of ExxonMobil (NYSE:XOM)'s oil assets to Seplat Energy, which has been in a deadlock for nearly two years. Minister Heineken (AS:HEIN) Lokpobri indicated today that a resolution could be imminent, which would help to boost Nigeria's flagging oil output. This development follows a series of engagements, including President Tinubu's discussions with ExxonMobil officials in June and ongoing negotiations aimed at overcoming the legal and regulatory hurdles that have stalled the $1.3 billion deal.
In February 2022, Seplat Energy had agreed to acquire a significant stake in four offshore licences from an ExxonMobil subsidiary, a transaction that would grant them a 40% operating interest in these valuable shallow-water assets. The deal initially received backing from former President Buhari but faced obstacles after the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) disapproved of the transaction.
The situation was further complicated when the Nigerian National Petroleum Corporation Limited (NNPCL) contested ExxonMobil's right to sell the assets, asserting its own rights of first refusal. This led to an ensuing legal battle that has impeded Seplat's efforts to expand its portfolio through strategic asset acquisitions.
Despite these challenges, Seplat CEO Roger Brown remains focused on the acquisition, particularly highlighting the importance of natural gas reserves within these assets. The reserves are critical for supplying power plants and align with previous divestment trends by other major oil companies like Shell (LON:SHEL) Plc.
If resolved, the acquisition would not only be a significant milestone for Seplat Energy but also for Nigeria's oil industry. It is anticipated that the successful transfer of these assets could reignite crude production levels in Nigeria, promoting competition and growth within the sector. The constructive engagement between Minister Lokpobiri and Seplat offers a beacon of hope for an industry eagerly awaiting this impasse to break.
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