Seplat Energy Commits to Concluding $1.3 Billion Acquisition of ExxonMobil Assets

Seplat Energy Plc, a Nigerian and London-listed energy company, remains steadfast in its interest to acquire oil and gas assets from Exxon Mobil Corporation. The company's CEO, Roger Brown, recently expressed their commitment to completing the deal, which has experienced significant delays over the past year.

Optimism Amidst Leadership Transition

Seplat Energy Plc is optimistic about the potential shift in approach under Nigeria's new President, Bola Ahmed Tinubu, compared to his predecessor, Muhammadu Buhari. While Buhari initially approved the deal, he later reversed his decision. Seplat anticipates a more favorable outcome under President Tinubu's leadership.

Highlighting the company's determination, Brown stated, "We are still interested in the assets. We still like the company we're buying. We think it's a game-changing operation." This reaffirms Seplat Energy's resolve to proceed with the acquisition.

Background of the Deal

In February 2022, Seplat entered into a substantial deal valued at up to $1.6 billion to acquire Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil. The objective was to enhance Seplat's production capacity to 146,000 barrels of oil equivalent per day (boepd) and expand its proven and probable liquids reserves from 241 million barrels to 650 million barrels.

The Acquisition Details

Seplat's acquisition includes a 40% operating ownership of 300 producing wells situated in four oil mining leases (OMLs 67, 68, 70, 104), along with the associated infrastructure. However, the remaining 60% partnership is held by the Nigerian National Petroleum Corporation (https://nnpcgroup.com/).

In addition to the operating ownership, the MPNU assets encompass a 51% 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 an undeveloped gas potential of 2,910 billion standard cubic feet (Bscf).

The Nigerian National Petroleum Company Limited (NNPCL) previously filed a lawsuit opposing the sale and sued Exxon Mobil, asserting its right to acquire the blocks directly from the US major. However, Brown clarifies that Seplat is acquiring a subsidiary, not licenses, emphasizing, "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."

Hidden Value in the Deal

Brown's view was that the hidden value for Seplat in the Exxon deal lies in the natural gas present in the blocks. Seplat already ranks among the largest domestic suppliers of gas to Nigerian power plants. Brown suggests that the majority of the gas within the licenses may be earmarked for export, either as a third-party source for Nigeria LNG Limited, which faces a shortage of feedstock, or through a separate floating production facility.

Seplat Energy Plc's pursuit of these oil and gas assets underscores its strategic vision and commitment to furthering Nigeria's energy sector. With their continued interest and optimism for a successful outcome, Seplat is poised to make significant strides in expanding its operations and contributing to the country's energy landscape.