It has been 12 months since Seplat Energy announced that it has entered into agreements with ExxonMobil to acquire the entire share capital of Mobil Producing Nigeria Unlimited (MPNU), yet the deal has not been finalised.

Seplat offered ExxonMobil a purchasing price of $1,283 million plus up to $300 million contingent consideration to buy the stake in the shallow water business

Ripples Nigeria understands that Mobil Producing Nigeria Unlimited is owned by ExxonMobil and the Nigerian National Petroleum Company Limited (NNPCL), with the former accounting for a 40 per cent stake and the latter holding 60 per cent.

MPNU is a company that controls four oil mining leases (OMLs 67, 68, 70, 104). Its portfolio includes; one of Nigeria’s largest export facilities, the Qua Iboe Terminal.

It also has a 51 per cent interest in Bonny River Terminal and Natural Gas Liquids Recovery Plants at EAP and Oso.

The acquisition had been scheduled to be completed in the Second Half (H2) of 2022, however, two months after the end of H2 last year, the completion of the deal is still under doubt.

Acquisition of ExxonMobil’s asset is expected to bolster Seplat Energy’s ability to drive increased growth, and profitability and increase stakeholder investments, as well as drive profit for a global financing syndicate comprising Nigerian and international banks

Setbacks to Seplat

Already, Seplat has deposited $128 million for the purchase of the MPNU assets, but it is experiencing a blockage from the majority stakeholder, NNPC.

The completion of the deal is dependent on Ministerial Consent, and with President Muhammadu Buhari, serving as Petroleum Minister, his approval is needed

Also, regulatory approvals from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Federal Competition and Consumer Protection Commission.

While President Buhari initially give the much-needed approval in August 2022, he reversed the decision, as the oil and gas industry regulator, NUPRC, disagreed with the takeover.

Both Buhari’s and NUPRC’s refusal to approve the deal worked in favour of the NNPC, which triggered its first refusal right to block the deal between Seplat and ExxonMobil, in a bid to take over the 40 per cent stake for itself.

NNPC had written to ExxonMobil, stating, “We are aware that you reached an agreement to divest from onshore and shallow waters JVs,” the NNPC said, adding, “clearly we are interested.”

Will setbacks lead to failed deal?

A new administration might create new bottlenecks for Seplat or lead to the termination of the deal with ExxonMobil, hence, the company racing to take control of the asset before May 29, 2023.

The end of Buhari’s tenure on May 29, 2023, when he is constitutionally bound to hand over to President-elect, Bola Tinubu, will lead to a change in the cabinet and government’s policies for the oil and gas industry.

This means that the commencement of Tinubu’s administration will bring about a new Minister of Petroleum, who has the right to approve such deals

Seplat’s Chief Executive Officer, Roger Brown, expressed eagerness to complete the deal before within the remaining term of President Buhari before a new president is sworn into office.