Yemisi Izuora
Indigenous oil company Seplat has announced the completion its acquisition of ExxonMobil’s onshore and shallow water business after an almost three-year process, in the most high-profile IOC divestment deal to get over the line.
Seplat Energy said it had closed its purchase of Mobil Producing Nigeria Unlimited (MPNU), the US company’s Nigerian subsidiary.
It came a month after the head of Nigeria’s upstream regulator, Gbenga Komolafe, said Nigeria’s government had given the deal its official consent.
The deal, worth almost $1.3 billion, makes Seplat Nigeria’s biggest domestic player, with net output set to rise by 71,000 boe/d from the 47,525 boe/d announced in September. It will also see a near doubling of Seplat’s 2P reserves, from 499 million barrels of oil equivalent to 908 million boe, the company said.
It covers stakes in four oil mining licenses — OMLs 67, 68, 70 and 104 — including more than 90 platforms and 300 producing wells, in addition to the Qua Iboe export terminal and the Bonny River terminal and natural gas plant.
Some 150,000 b/d of Qua Iboe crude is exported from the terminal to refiners in Europe and Asia, according to data from S&P Global Commodities At Sea.
ExxonMobil will retain its deepwater assets, including stakes in the Erha, Usan and Bonga developments, which produced a gross combined 219,000 b/d of oil in November, according to data from the Nigerian Upstream Petroleum Regulatory Commission.
The transaction, first agreed in February 2022 and expected to close that year, faced significant hurdles from the get-go, including opposition from Nigerian officials to legal challenges, with state-owned Nigerian National Petroleum Co. suggesting it could exercise its pre-emption rights on the deal. NNPC did not drop its legal challenge until June 2024.
In a statement, Roger Brown, the CEO of Seplat, said the completion marked “a major milestone” for the company.
“We have acquired a company with one of the best portfolios of assets and related infrastructure in a world class basin, providing enormous potential for the Seplat Group. Our commitment is to invest to increase oil and gas production while reducing costs and emissions, maximizing value for all our stakeholders,” he said.
“MPNU is a perfect fit with our strategy to build a sustainable business that can deliver affordable, accessible and reliable energy for Nigeria alongside attractive returns to our shareholders.”
In a statement to S&P Global Commodity Insights, an ExxonMobil spokesperson said: “We completed the sale of our equity interest in Mobil Producing Nigeria Unlimited to Seplat Energy. We value our relationships with the government and people of Nigeria, and we will continue to focus on our deepwater operations as we maximize value for all stakeholders.”
The Seplat-ExxonMobil deal is the third to be rubber-stamped by Nigeria’s government, after deals between Oando and Eni, and Chappal and Equinor, closed in August and November, respectively.
The exodus of international oil companies from onshore and shallow water fields in the restive Niger Delta — which has endured years of spills, theft and sabotage marks a major shift for Nigeria’s oil sector and economy, which is dependent on crude revenue.
Output has fallen in recent years and is well below Nigeria’s approximately 2.2 million b/d capacity and 2005 peak of 2.45 million b/d.
Nigeria pumped 1.47 million b/d of crude oil in November, according to the latest Platts OPEC Survey from Commodity Insights.
Domestic firms, including Seplat and Oando, insist local players can boost production by showing greater commitment to mature fields and smoothing ties with local communities, despite their shallower pockets.
However, Nigerian officials seemed to be attempting to prevent IOC exits for much of 2024. The NUPRC previously offered to speed up approvals if IOCs took responsibility for spills.
Shell’s deal with the Renaissance consortium for its Niger Delta business and TotalEnergies’ asset sale to Chappal, which is based in Mauritius, is still awaiting approval from Abuja.
Despite exiting Nigeria’s onshore in favor of frontiers like Namibia and Guyana and less risky jurisdictions, analysts say oil majors remain committed to Nigeria’s highly prospective deepwater