NNPCL, ExxonMobil reach settlement on $1.28bn asset sale to Seplat

By Stanley Onyeka, Lagos

NNPC Limited and ExxonMobil have signed the settlement agreement on the stalled $1.28 billion asset sale by Mobil Producing Nigeria Unlimited to Seplat Energy Offshore Limited.

This is confirmed in a photo news posted on the the Company’s official X handle @nnpclimited with the caption: “Settlement agreement between NNPC Ltd. and Mobil Producing Nigeria Unlimited, Mobil Development Nigeria Inc., and Mobil Exploration Nigeria Inc. signed regarding the proposed divestment of a 100% interest in Mobil Producing Nigeria Unlimited to Seplat Energy Offshore Limited.”

The settlement followed President Bola Tinubu’s assurance to a delegation from ExxonMobil Upstream Company that the federal government is committed to resolving the divestment issues between the company and Seplat Energy, currently under litigation.

Recall that in May 2023, Seplat Energy announced the extension of the share sale and purchase agreement (SSPA) for the acquisition of ExxonMobil’s share capital of Mobil Producing Nigeria Unlimited (MPNU), amid the delay in obtaining approval for the deal.

A statement by Seplat’s Chief Executive Officer, Roger Brown, read: “Seplat Energy announces that it has extended with Mobil Development Nigeria Inc. and Mobil Exploration Nigeria Inc. (“ExxonMobil”) the Share Sale and Purchase Agreement (“SSPA”) for the acquisition of ExxonMobil’s share capital of Mobil Producing Nigeria Unlimited (“MPNU”) (the “Transaction”), in order to preserve the Transaction pending the resolution of certain legal proceedings and receipt of applicable regulatory approvals.

“There has been no material change in terms of the announcements dated 25 February 2022 and 24 May 2023.

“The headline consideration, effective date and the contingent payment structure remain unchanged.” 

Settlement agreement between NNPC Ltd. and Mobil Producing Nigeria Unlimited, Mobil Development Nigeria Inc., and Mobil Exploration Nigeria Inc. signed regarding the proposed divestment of a 100% interest in Mobil Producing Nigeria Unlimited to Seplat Energy Offshore Limited.

The settlement ends a two-year heated tussle over the assets, which started in February 2022, when Seplat Energy announced an agreement to acquire ExxonMobil’s 40% stake in MPNU — with the expectation that the transaction will be closed in the second half of the year.

However, on May 19, 2022, the Nigerian Upstream Petroleum Regulatory Company (NUPRC), announced the disapproval of the transaction due to “overriding national interest”.

Two months later, Seplat again informed that the NNPC had won a court injunction ExxonMobil from selling its assets in Nigeria, which forced former President Muhammadu Buhari to withdraw his initial consent for the acquisition on August 10, 2022.

Amid the back and forth, Seplat, a year ago, announced an extension of the SSPA for the acquisition.