Nigeria is making moves to boost its oil production by resolving a long-standing dispute over the sale of ExxonMobil’s assets. The federal government recently met with Seplat Energy to find a solution to the stalemate that has delayed the $1.3 billion oil asset sale for almost two years. The meeting, which took place in Abuja, aimed to resolve the prolonged altercation, according to Senator Heineken Lokpobiri, the Minister of State for Petroleum (Oil).
Lokpobiri emphasised the urgency of settling the matter quickly, as Nigeria is eager to ramp up its crude oil production, which has been declining for over three years. The proposed deal involves Seplat paying $1.3 billion for an Exxon unit that holds a 40% operating stake in four shallow-water licenses. If successful, this transaction will be one of the largest divestments in Nigerian history, following the trend of energy majors offloading unwanted assets.
The sale was initially endorsed by former President Muhammadu Buhari, who also served as Nigeria’s oil minister. However, the approval was later rejected by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), leading to a dispute. The Nigerian National Petroleum Company Limited (NNPC), which holds 60% of the permits, opposed the sale and took legal action against Exxon in Abuja, claiming its right to acquire the blocks itself. This opposition from NNPC has blocked the deal between Seplat and ExxonMobil.
Seplat’s Chief Executive, Roger Brown, clarified that the purchase involves buying shares from US companies, making it a different type of acquisition. He also highlighted the value of natural gas in the blocks, which is a significant factor for Seplat as it is already a major supplier of natural gas to Nigerian power plants.
In a separate development, officials of ExxonMobil visited President Bola Tinubu in Abuja, where the president pledged to ensure competition in the oil and gas industry in the country. Exxon Nigeria controls four oil mining leases and has a significant interest in Nigeria’s export facilities and natural gas recovery plants.
Following the meeting with the Seplat team, Lokpobiri expressed optimism, describing it as a significant step towards ending the stalemate. He stated, “In pursuit of resolving the ExxonMobil and NNPC divestment dispute, as per our mandate to aggressively increase production, I engaged in constructive discussions with Seplat Energy, led by its Managing Director, Mr. Roger Brown. Our deliberations were incredibly fruitful, marking a significant step forward in ending the impasse and paving the way for the nation to reap prosperity from the assets acquisition.”
To further enhance Nigeria’s oil output, the federal government has withdrawn court cases against Eni and Shell, aiming to remove obstacles to the country’s oil production.