Nigeria greenlights Seplat Energy’s buy of ExxonMobil’s Nigerian unit

Nigerian President Muhammadu Buhari, who doubles as oil minister, has granted consent to the acquisition of ExxonMobil’s Nigerian unit by Seplat Energy, in a $1.28 billion deal announced in February.

According to the statement published Monday, Buhari granted the consent in his capacity as minister of petroleum resources and, in consonance with the country’s drive for foreign direct investment (FDI) in the energy sector, okayed the acquisition of ExxonMobil shares in the United States by Seplat Energy Offshore Limited. Exxon and Seplat are expected to operate the unit’s oil licenses, supporting Nigeria meet its OPEC production quota in the short term as well as accelerate the development of gas resources in the area.

Seplat, which is listed on the London and Nigerian stock exchanges, announced in February its offshore unit had entered into a landmark Sale and Purchase Agreement to buy the entire share capital of Exxon’s Nigerian offshore shallow water business for $1.28 billion, plus a further consideration of up to $300 million based on the oil price and the average production of the unit, Mobil Producing Nigeria Unlimited, over a five-year period.

Buhari gave his ministerial consent to the deal citing the extensive benefits of the transaction to the Nigerian energy sector and the larger economy, especially now the federal government is struggling to meet the OPEC quota of 1.826 million barrels per day production. All environmental and abandonment liabilities will be adequately mitigated by ExxonMobil.