. Seplat Energy confirms receipt of ministerial approval
. NUPRC insists no consent granted
Industry experts are weary of the topsy-turvy surrounding three separate statements yesterday, following the approval by President Muhammadu Buhari of Seplat Energy‘s acquisition of the entire share capital held by Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation.
In a statement conveying the approval on Monday, presidential spokesman, Femi Adesina, said the President approved the share purchase deal in his capacity as the Minister of Petroleum Resources, thereby overriding the NNPC Limited’s claim to pre-emption rights (right of first refusal).
The statement reads: “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.”
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.
In a quick acknowledgment, dual-listed Seplat Energy Plc, announced that it has received a letter from the Minister of State for Petroleum Resources notifying it of the President’s Ministerial Consent for the share purchase transaction.
This was conveyed in a company statement issued by the Director, External Affairs & Sustainability informed, Dr. Chioma Nwachuku.
The statement said approval was “granted to Seplat Energy Offshore Limited’s (a Seplat Energy subsidiary) cash acquisition of the entire share capital of Mobil Producing Nigeria Unlimited (MPNU) from its shareholders, Mobil Development Nigeria Inc (MDNI) and Mobil Exploration Nigeria Inc (MENI), being entities of Exxon Mobil Corporation (ExxonMobil) registered in Delaware, USA.”
The statement reads further: “As announced on 25 February 2022, Seplat Energy had agreed to acquire the entire share capital of MPNU for a purchase price of $1.283 billion plus up to $300 million contingent consideration. The transformational transaction will create one of the largest independent energy companies on both the Nigerian and London Stock Exchanges, and bolster Seplat Energy’s ability to drive increased growth, profitability and overall stakeholder prosperity.
“The approval is given by His Excellency, President Muhammadu Buhari in his capacity as the Honourable Minister of Petroleum Resources (HMPR), with the granting of Ministerial Consent pursuant to the powers of the Minister under Paragraphs 14-16 of the First Schedule of the Petroleum Act, 1969. A separate announcement from the State House was released earlier.
“In the letter, the President as HMPR directed that the HMSPR shall convey Ministerial Consent to all relevant parties, including but not limited to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Nigerian National Petroleum Company Limited (NNPC), the ExxonMobil companies, the Federal Competition and Consumer Protection Commission (FCCPC), and Seplat Energy/Seplat Energy Offshore Limited.
However, no sooner had the Board and Management of Seplat Energy thanked the President for the deal approval than the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) insisted that status quo remains in respect of ExxonMobil/Seplat Energy share acquisition.
In a statement signed by the Commission Chief Executive, Gbenga Komolafe, clarified that the NUPRC, “in line with the provisions of the Petroleum Industry Act 2021 is the sole regulator in dealing with such matters in the Nigerian upstream sector.”
The statement continues: “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 a predictable and conducive regulatory environment at all times in the Nigerian upstream sector,” it added.
The NUPRC, in line with the provisions of the Petroleum Industry Act 2021, is the sole regulator in dealing with such matters in the Nigerian upstream sector.
Industry experts had greeted the President’s approval of the share purchase with excitement, saying: “it increases the level of confidence in the country that there is still some sanity in the system that will bow to superior logic.”
However, the excitement was dampened by what they described as “complexities” surrounding the deal especially given the NNPC’s attempt to block the transaction in a lawsuit.
Recall that in February, Seplat had entered into an agreement to acquire the entire share capital of MPNU worth $1.6billion from ExxonMobil that will enable it scale up production by 95,000 barrels a day from assets in a joint venture between ExxonMobil and NNPC.
But the deal was blocked by the NNPC, while the regulatory authorities also declined consent to the transaction.
In July, Seplat Energy informed investors that NNPC blocked the deal through a court injunction restraining Exxon Mobil from selling its assets in Nigeria.
It noted that the court’s decision on July 6, was temporary and forbade MPNU and the defendants from consummating any asset disposal in MPNU, not excluding the share sale and purchase deal it struck with Seplat in February.
NNPC had prayed the court to declare that a conflict happened between it and MPNU over the “interpretation of preemption rights under their Joint Operating Agreement (JOA) and order NNPC and MPNU to arbitration as required by the JOA.”
Seplat added that neither it nor Seplat Energy Offshore Limited was a party in the lawsuit, insisting the share purchase agreement remains valid.