Seplat’s Acquisition of Exxon Mobil Gets Ministerial Consent
President Muhammadu Buhari, in his capacity as Minister of Petroleum Resources, has consented to the acquisition of Exxon Mobil by Seplat Offshore Limited. The acquisition required ministerial consent to be consummated and now appears to have crossed the hurdle.
Earlier in the year, Exxon Mobil announced that it was divesting its shallow water oil operations to Seplat, an indigenous petroleum exploration and development company. Shortly after the announcement, there were speculations that the Nigerian National Petroleum Corporation (NNPC) had objected to the transaction by seeking to exercise a supposed right of first refusal to acquire Mobil’s interest under the Joint Operatorship Agreement (JOA) binding the NNPC and Exxon Mobil.
Legal experts took a different view and indicated that the transaction only required ministerial consent as it was an acquisition of shares in Exxon Mobil and not a direct transfer of the oil mining lease (OML) jointly owned by NNPC and Exxon Mobil. The JOA was said to only be applicable to the OML and not to corporate matters of the different entities.
In a press statement on Monday, presidential spokesman, Femi Adesina noted that President Buhari gave ministerial consent to the transaction as structured by the parties as part of his commitment to drive investment in the oil and gas sector following the passage of the Petroleum Industry Act.
The full statement is reproduced below:
PRESIDENT BUHARI CONSENTS TO ACQUISITION OF EXXON MOBIL SHARES BY SEPLAT ENERGY OFFSHORE LTD
In his capacity as Minister of Petroleum Resources, and in consonance with the country’s drive for Foreign Direct Investment in the energy sector, President Muhammadu Buhari has consented to the acquisition of Exxon Mobil shares in the United States of America by Seplat Energy Offshore Limited.
Exxon Mobil had entered into a landmark Sale and Purchase Agreement with Seplat Energy to acquire the entire share capital of Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation, Mobil Development Nigeria Inc, and Mobil Exploration Nigeria Inc, both registered in Delaware, USA.
Considering the extensive benefits of the transaction to the Nigerian Energy sector and the larger economy, President Buhari has given Ministerial Consent to the deal.
The President, in commitment to investment drive in light of the Petroleum Industry Act, granted consent to the Share Sales Agreement, as requested by the parties to the transaction, and directed that the approval be conveyed to all the parties involved.
Exxon Mobil/Seplat are expected to carry out operatorship of all the oil mining licenses in the related shallow water assets towards production optimization to support Nigeria’s OPEC quota in the short term as well as ensure accelerated development and monetization of the gas resources in the assets for the Nigerian economy.
President Buhari also directed that all environmental and abandonment liabilities be adequately mitigated by Exxon Mobil and Seplat.
