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ExxonMobil Awaits NNPC’s Lifting of Injunction to Finalize Asset Sale to Seplat Energy

ExxonMobil has announced that it is waiting for the Nigerian National Petroleum Company Limited (NNPC) to lift the injunction

ExxonMobil Awaits NNPC’s Lifting of Injunction to Finalize Asset Sale to Seplat Energy

ExxonMobil has announced that it is waiting for the Nigerian National Petroleum Company Limited (NNPC) to lift the injunction that currently blocks the sale of its asset to Seplat Energy. This information was disclosed by the company’s Regional Communications Manager for Africa, Oge Udeagha, in response to an inquiry.

Udeagha confirmed that the NNPC had recently signed a settlement agreement with ExxonMobil regarding the proposed divestment of a 100% interest in Mobil Producing Nigeria Unlimited to Seplat Energy. He elaborated, “The settlement agreement between NNPC Ltd and Mobil Producing Nigeria Unlimited, Mobil Development Nigeria Inc., and Mobil Exploration Nigeria Inc. pertains to the divestment of our full interest in Mobil Producing Nigeria Unlimited to Seplat Energy Offshore Limited.”

This resolution is significant, as it is anticipated to increase Nigeria’s oil production by approximately 480,000 barrels per day. The Minister of State for Petroleum, Heineken Lokpobiri, highlighted the financial implications of the delayed divestment, noting that Nigeria had lost about $30 billion over the past two and a half years due to the unresolved sale. He mentioned that the asset, which was producing around 600,000 barrels per day, saw a drastic reduction in output to 120,000 barrels per day following the onset of the crisis in 2022, resulting in millions of dollars in daily losses.

The divestment agreement between Seplat Energy and ExxonMobil has faced delays for over two years. On July 12, 2022, it was reported that the NNPC blocked the sale, and subsequently won a court decision that temporarily halted the transaction. Seplat had initially agreed to acquire ExxonMobil’s subsidiary for at least $1.28 billion in February. However, the NNPC sought to block the transaction in favor of taking over the permits themselves, leading to a legal dispute.

In a lawsuit filed on July 5, 2022, the NNPC requested the Federal High Court to either acknowledge that a dispute existed between the parties over preemption rights or mandate arbitration. Despite not being a party to the lawsuit, Seplat maintained that its agreement with ExxonMobil was “still valid” and expressed confidence that the matter would be resolved legally.

Udeagha’s recent statement emphasized that the settlement agreement includes NNPCL’s commitment to lift the injunction, enabling the completion of the asset sale to Seplat. “We have reached an agreement with NNPCL to lift the injunction that prevented the sale of Mobil Producing Nigeria Unlimited shares to Seplat,” he confirmed.

This development marks a significant step towards resolving the prolonged divestment issue, potentially stabilizing and boosting Nigeria’s oil production and economic prospects.

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