60 years after the American firm came into Nigeria in search of oil, ExxonMobil is exiting, further spurring divestments from Nigeria’s oil sector.
In a contract between ExxonMobil and Seplat Energy, the entire oil assets Mobil Producing Nigeria Unlimited MPNU) in Nigeria will be transferred to Seplat Energy.
According to regulatory filings, under the contract terms, Seplat will buy out ExxonMobil’s interests at $1.3 billion with a potential for $300 million premised on certain pre-agreed considerations.
“The Transaction encompasses the acquisition of the entire offshore shallow water business of ExxonMobil in Nigeria,” the statement said, “which is an established, high-quality operation with a highly skilled local operating team and a track record of safe operations, producing 95 kboepd (W.I.) in 2020.”
Exxon Mobil, a member of the league of the world’s seven major international operating companies, popularly called “Seven Sisters,” runs another local subsidiary Esso Exploration and Production Nigeria Limited.
Mobil is similarly in the process of divesting its stake in Esso, where it holds 40 per cent, through MPNU and NNPC the remainder.
“This is a win-win for both companies. Together, we will strengthen our focus on profitability and cash generation to reinvest in Nigeria’s energy development,” Seplat’s chief Roger Brown said in respect of the newly announced deal with Exxon Mobil.
Shares in Seplat gained 9.99 per cent on Lagos Custom Street at 10.45 WAT on Friday, following the news.
In large measures, international oil companies (IOCs) are scaling back investment in fossil fuels like petrol, while expanding their commitment to cleaner energy in line with a global roadmap aiming for net zero emissions by 2050.
“ExxonMobil Nigeria has regular disposals of surplus materials and assets,” as reported on the landing page of the company’s website.
According to Ben van Beurden, CEO of Royal Dutch Shell, while speaking to a gathering of investors last May, Nigerian oil is out of tune with his company’s green energy plan.
Yet in another divestment, Seplat’s eyes are also reportedly set on the takeover of the stake of Royal Dutch Shell in another joint venture with NNPC, estimated at $4 billon.