The Nigerian National Petroleum Company Limited (NNPC Ltd.) announced the signing of a settlement agreement to permit the sale of ExxonMobil’s share in Mobil Producing Nigeria Unlimited (MPNU) to Seplat Energy Plc.
This comes two years after ExxonMobil revealed its plan to divest, which prompted NNPC to respond and resulted in a court conflict that commenced in February 2022.
But in a statement released on Thursday, the national oil corporation claimed that the divestment process was completed, allowing Seplat Energy to purchase MPNU from ExxonMobil.
The $1.28 billion contract has been on hold for the past two years due to legal disputes with NNPC and ExxonMobil.
NNPC, however, stated that the agreement has been ratified and a resolution has been achieved.
The NNPC said in a statement that it has “signed a settlement agreement between NNPC Ltd. And MPNU, Mobil Development Nigeria Inc., and Mobil Exploration Nigeria Inc. regarding the proposed divestment of a 100% interest in MPNU to Seplat Energy Offshore Limited.”
Backstory
Seplat Energy Plc announced on February 25, 2022, that it will pay $1.28 billion to Exxon Mobil Corporation, Delaware for all of the shares of Mobil Producing Nigeria Unlimited.
Taking over ExxonMobil Nigeria’s offshore shallow water operations was part of the transaction.
However, concerning the sale of these assets, NNPC decided to exercise its Right of First Refusal (RFR).  Â
The Joint Operating Agreement (JOA) of the Joint Venture (JV), which describes NNPC’s position on Seplat Energy Plc’s planned acquisition of the shares, contains this RFR.
The purchase was not approved by the federal government in May 2022, among other reasons being the overriding national interest.
Furthermore, a judge in Abuja granted an “order of interim injunction” on July 6, 2022, which forbids Exxon from completing any divestiture in a subsidiary that owns four licenses in Nigeria.
President Tinubu’s involvement
In the meantime, President Tinubu met on Tuesday with Liam Mallon, the president of ExxonMobil, and other officials, promising the team a speedy settlement of the deal between ExxonMobil and Seplat. Â
The president declared that the federal government is committed to finding a quick solution to the divestment disputes.
Tinubu stated on Tuesday, “We have been pushing for closure on divestment issues, and I believe the other party, Seplat, is open to this.”
IOC choosing to make investments abroad
Remarkably, ExxonMobil is not the only international oil firm (IOC) choosing to transfer its operations offshore and sell off its interests in the onshore portion of the oil and gas industry through a divestment plan.
An agreement was made in January by oil firm Shell Plc to sell its onshore oil assets in Nigeria to a local partnership for a sum exceeding $1.3 billion, subject to government approval.Â
Shell expects to receive up to $1.1 billion in further payments on top of the initial amount. The buying group, called Renaissance, is made up of Petrolin, ND Western, Aradel Energy, First E&P, and Waltersmith.
In a similar vein, after Shell announced its divestiture, TotalEnergies announced plans to sell off its minority interest in a major onshore oil joint venture in Nigeria. Â
