DESPITE the delay in finalising the $1.6 billion deal to acquire Mobil Producing Nigeria Unlimited (MPNU), an oil and gas assets from ExxonMobil Corporation, Seplat Energy Plc, a Nigerian and London-listed energy company, has expressed optimism.
Seplat Energy’s Chief Executive Officer, Roger Brown, in an interview with Bloomberg, recently made a statement affirming their commitment to completing the deal.
According to the report, Seplat Energy Plc is optimistic about Nigeria’s new president, Bola Tinubu, taking a different approach to the transaction compared to his predecessor, Muhammadu Buhari. The former president had initially approved the deal but later reversed his decision.
Brown’s statement highlights the company’s determination to proceed with the acquisition and its expectation of a more favourable outcome under President Tinubu’s leadership.
“We are still interested in the assets. We still like the company we’re buying. We think it’s a game-changing operation,” Brown told Bloomberg.
It will be recalled that in February 2022, Seplat made a significant deal worth up to $1.6 billion to acquire Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil. This acquisition aimed to boost Seplat’s production capacity to 146,000 barrels of oil equivalent per day (boepd) and increase its proven and probable liquids reserves from 241 million barrels to 650 million barrels.
According to Seplat’s acquisition note, the MPNU assets include a 40 percent operating ownership of 300 producing wells in four oil mining leases (OMLs 67, 68, 70, 104), along with associated infrastructure. However, the Nigerian National Petroleum Corporation (NNPC) holds the remaining 60 percent partnership.
The MPNU assets also include a 51 percent interest in the Qua Iboe Terminal, ownership of the Bonny River Terminal, Natural Gas Liquids Recovery Plants at EAP and Oso, 409 million barrels of proven and probable liquid reserves (2P), and 211 billion standard cubic feet of proven and probable gas reserves (2P), with the undeveloped gas potential of 2,910 billion standard cubic feet (Bscf).
Following an earlier lawsuit by the Nigerian National Petroleum Company Limited (NNPCL) against the purchase, former President Buhari granted his approval for Seplat to acquire MPNU’s assets on August 8, 2022.
However, after an objection was raised by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), President Buhari reversed his earlier decision two days later.
According to Bloomberg, the NNPCL has opposed the sale and sued Exxon Mobil, claiming it has the right to acquire the blocks itself from the US major. However, Roger Brown said his firm is purchasing a subsidiary rather than licenses.
“What we are buying are shares sold by US companies, so that is a completely different animal because we are buying a company. Exxon’s read of the situation is the same.”
Bloomberg also reports that Brown said the hidden value for Seplat in the Exxon deal is the natural gas in the blocks because Seplat is already one of the largest domestic suppliers of gas to Nigerian power plants.
According to Brown, it is most likely that most of the gas in the licenses would be destined for export, either as a third-party source for Nigeria LNG Limited, which is an expanding venture that is short of feedstock or via a separate floating production facility.
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