ExxonMobil Acquisition: Seplat Seeks Clarification, After Buhari’s U-Turn On Approval

Seplat Energy has said it is seeking clarification on the reversal of approval by President Muhammadu Buhari for its acquisition of ExxonMobil Corporation assets.

President Muhammadu Buhari had on Wednesday night reversed his authorisation of the acquisition of the entire share capital of Mobil Producing Nigeria Unlimited by Seplat Energy Offshore Limited.

Chief financial officer, Seplat Energy, Emeka Onwuka, disclosed this in a corporate filing on the Nigerian Exchange Limited, yesterday.

The company said it has not received official notification regarding the reversal but is still in talks with relevant authorities to confirm the latest development.

“Seplat Energy has become aware of a news report that Ministerial Approval of the company’s proposed acquisition of the entire share capital of Mobil Producing Nigeria Unlimited (“MPNU”) has been withdrawn,” the statement reads.

Seplat Energy has received no official notification of such a decision and is seeking clarification from the relevant authorities. We will continue to work with all parties to achieve a successful outcome for the proposed acquisition and will provide an update in due course.

“This announcement is made pursuant to Rule 17.10 of the Rulebook of the Nigerian Exchange, 2015 (Issuer’s Rule).”

President Muhammadu Buhari, on Wednesday, reversed his authorisation of the acquisition of ExxonMobil Corporation assets by the company – a few days after his initial approval.

Garba Shehu, presidential spokesperson, said the reversal was made to support the position of the upstream regulator — which frowned at the president’s approval.

The move puts the Presidency on the side of the Nigerian National Petroleum Company Limited which had earlier declined the $1.3 billion transaction.

On Monday, a statement by the Special Adviser to the President on Media and Publicity, Femi Adesina, revealed that President Buhari consented to acquisition of Exxon Mobil shares by Seplat Energy Offshore Ltd.

According to the Presidency, Buhari authorised the move in his capacity as Minister of Petroleum as a way to attract Foreign Direct Investment to the country.

But giving an update on the issue, the Senior Special Assistant to the President on Media and Publicity, Garba Shehu, reportedly said that Buhari had reversed the decision and the previous misunderstanding was because the “agencies involved in (the) decision had not coordinated well among themselves.”

Earlier, Shehu, who spoke to an online publication, said the President’s reversal of his earlier approval was in line with the position of the Nigerian Upstream Petroleum Regulatory Commission.

According to him, the confusion over ExxonMobil shares was because “the various agencies involved in the decision had not coordinated well among themselves and having looked at all of the facts with all of the ramifications, the president decided the position of the regulator is to be supported.”

In May 2022, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) had declined to approve the proposed acquisition due to “overriding national interest”.

Described as the first post-PIA acquisition deal, Seplat Energy plans to acquire Mobil Producing Oil assets from ExxonMobil for $1.28 billion.

But the deal was blocked by Nigerian National Petroleum Company (NNPC) Limited

NUPRC had, in a statement over Buhari’s earlier approval of the assets acquisition, said, as the sole regulator, it is the one that could deal with such matters. It therefore said the status quo remained.

The statement from the chief executive of the NUPRC, Gbenga Komolafe, said the Commission, in line with the provisions of the Petroleum Industry Act 2021, was the sole regulator in dealing with such matters in the Nigerian upstream sector.

NUPRC said: “As it were, the issue at stake is purely a regulatory matter and the Commission had earlier communicated the decline of Ministerial assent to ExxonMobil in this regard. As such the Commission further affirms that the status quo remains.

“The Commission is committed to ensuring predictable and conducive regulatory environment at all times in the Nigerian upstream sector.”

Seplat Energy Plc had, last February, announced an agreement to acquire the entire share capital of Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation, Delaware, for $1.28bn.

The transaction involved the acquisition of ExxonMobil Nigeria’s entire offshore shallow water asset; an established, high-quality operation with a highly skilled local operating team and a track record of safe operations.

The NNPC Limited, however, has a pre-emptive right over the asset and had last month won a court decision temporarily blocking Exxon Mobil Corporation from selling assets in Nigeria to Seplat Energy Plc.

A Judge in Abuja had granted NNPC an “order of interim injunction” on July 6, 2022, barring Exxon Mobil “from completing any divestment” in a unit that ultimately operates four licenses in Nigeria.