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  • Oil & Gas - News
  • Updated: June 29, 2023

Seplat Pledges To Complete $1.3 Billion Acquisition Of ExxonMobil

Seplat Pledges To Complete $1.3 Billion Acquisition Of Exxon

A Nigerian energy firm with a London listing, Seplat Energy Plc, has repeatedly indicated an interest in purchasing Exxon Mobil Corporation's oil and gas holdings.

The company's Chief Executive Officer, Roger Brown, just released a statement reiterating their commitment to finishing the purchase, which has been delayed for more than a year.

Seplat Energy Plc is hopeful that Nigeria's new President, Bola Ahmed Tinubu, will treat the transaction differently than his predecessor, Muhammadu Buhari.

The agreement had first received the former president's approval, but he later changed his mind.

The company's commitment to move through with the acquisition and its hope for a more positive conclusion under President Tinubu's guidance are both highlighted in Brown's statement.

We are still interested in the properties, Brown told Bloomberg. We still esteem the business we are purchasing. We believe it to be a revolutionary enterprise.

“We are still interested in the assets. We still like the company we’re buying. We think it’s a game-changing operation.”

Seplat struck a big agreement with US supermajor ExxonMobil in February 2022 to buy Mobil Producing Nigeria Unlimited (MPNU) for up to $1.6 billion.

With the acquisition, Seplat hoped to raise its proved and probable liquids reserves from 241 million barrels to 650 million barrels, increasing its production capability to 146,000 barrels of oil equivalent per day (boepd).

The MPNU assets contain a 40% operational ownership of 300 producing wells in four oil mining leases (OMLs 67, 68, 70, and 104) as well as related infrastructure, according to Seplat's purchase note dated February 25, 2022.

However, the remaining 60% of the partnership is owned by the Nigerian National Petroleum Corporation (NNPC).

The MPNU's assets also consist of a 51% stake in the Qua Iboe Terminal, ownership of the Bonny River Terminal, natural gas liquids recovery facilities at EAP and Oso, 409 million barrels of proven and probable liquid reserves, 211 billion standard cubic feet of proven and probable gas reserves, and 2,910 billion standard cubic feet (Bscf) of untapped gas potential.

Former President Buhari gave his assent for Seplat to purchase the assets of MPNU following a previous litigation by the Nigerian National Petroleum Company Limited (NNPCL) against the purchase.

President Buhari changed his mind two days later in response to a complaint made by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

The NNPCL rejected the sale and filed a lawsuit against Exxon Mobil on the grounds that it had the legal authority to buy the blocks directly from the US energy giant.

Roger Brown, however, asserts that rather than buying licences, his company is buying a subsidiary.

“What we are buying are shares sold by US companies, so that is a completely different animal because we are buying a company. Exxon’s read of the situation is the same.”

The natural gas in the blocks, according to Brown, is the deal's hidden value for Seplat because the company is already among the biggest local suppliers of gas to Nigerian power plants, according to a separate report from Bloomberg.

According to Brown, it is most probable that the majority of the gas contained in the licences will be used for export, either through a separate floating production plant or as a third-party source for Nigeria LNG Limited, a growing business that lacks feedstock.

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