Nigeria’s daily crude oil output may witness a significant boost as the Nigerian National Petroleum Company Limited (NNPCL) and ExxonMobil take strides towards resolving their dispute concerning the sale of ExxonMobil’s assets to Seplat Energy.
Confirming a settlement agreement on Thursday, the NNPCL announced the resolution of its differences with ExxonMobil entities in Nigeria regarding the proposed divestment of a 100% interest in Mobil Producing Nigeria Unlimited to Seplat Energy Offshore Limited. This development swiftly follows President Bola Tinubu’s intervention in the deadlock between NNPCL and ExxonMobil, which had been impeding the asset sale to Seplat.
Minister of State for Petroleum, Heineken Lokpobiri, recently highlighted the staggering losses incurred by Nigeria – an estimated $30 billion over two and a half years – due to the prolonged impasse. The disagreement saw Nigeria’s daily oil production plummet from 600,000 to 120,000 barrels, exacerbating financial strains for the nation.
The genesis of the dispute dates back to 2022 when ExxonMobil and Seplat Energy unveiled a $1.6 billion sales agreement for the transfer of ExxonMobil’s shares in the NNPCL to Seplat. However, the transaction hit a snag when the NNPCL exercised its right of pre-emption, stalling the deal.
Despite nearly two years of litigation, a breakthrough now appears imminent. The NNPCL’s announcement of a settlement agreement suggests an end to the protracted crisis, potentially reinstating the 480,000 barrels of daily crude oil output that Nigeria desperately needs.
Seplat’s Director of External Affairs and Social Performance, Chioma Afe, hailed the development as a positive step, emphasizing the significance of regulatory approvals to finalize the deal. Afe underscored the potential economic impact, anticipating a substantial contribution to Nigeria’s overall oil production.
ExxonMobil’s response to the latest developments remains pending, but the conclusion of the deal promises to bolster Seplat’s operations significantly. The acquisition would afford Seplat an additional production capacity of approximately 95,000 barrels of oil equivalent per day from ExxonMobil’s shallow-water assets, further consolidating Nigeria’s energy sector under domestic players.
This resolution marks a pivotal moment in Nigeria’s oil industry, heralding the prospect of increased domestic control and efficiency in the management of vital energy resources.
