On Tinubu’s Directives, NNPC Drops Case Against ExxonMobil’s $1.3bn Assets Sale to Seplat Energy

Mayowa DurosinmiJune 14, 20241 Mins read348

On Tinubu's Directives, NNPC Drops Case Against ExxonMobil's $1.3bn Assets Sale to Seplat Energy

L—R: ExxonMobil's Upstream Head, Liam Mallon | Nigeria's President Bola Tinubu

The Nigerian National Petroleum Company (NNPC) has reportedly withdrawn its lawsuit against ExxonMobil three weeks after President Bola Tinubu’s decisive directives, which were instrumental in clearing the way for Seplat Energies to acquire its $1.3 billion oil assets.

Recall that the stalled sale of assets was announced in 2022 during the Buhari-led administration.

ExxonMobil’s assets were the shallow-water OMLs 67, 68, 70, and 104 and significant stakes in Qua Iboe terminal and Bonny River terminal, two of Nigeria’s largest export facilities.

However, NNPC, led by Mele Kyari, filed a lawsuit preventing ExxonMobil from selling its assets to Seplat on violation of pre-emption rights.

As a result of the lawsuit, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) denied ExxonMobil the approval of the acquisition, citing ‘overriding national interest .’

President Tinubu, on February 28, 2024, issued three Executive Orders: Oil and Gas Companies (Tax Incentives, Exemption, Remission, etc.) order, 2024; Presidential Directive on Local Content Compliance Requirements, 2024; and Presidential Directive on Reduction of Petroleum Sector Contracting Costs and Timelines.

The orders were followed up by a meeting with ExxonMobil’s executive and President Tinubu on May 29, 2024, where he directed the Ministry of State for Petroleum Resources (Oil) and NNPC to sort out the legal hurdle delaying the purchase.

On May 30, the NNPC finalised a settlement agreement with ExxonMobil, enabling the divestment of ExxonMobil’s entire stake in Mobil Producing Nigeria Unlimited (MPNU) to Seplat Energy Plc.

The settlement agreement, however, was based on terms that were not disclosed.

Meanwhile, a separate deal by Shell (SHEL), which agreed to sell its Nigerian onshore oil business to a group of local companies for more than $1.3B, awaits approval after it was announced in January.