• Sunday, June 23, 2024
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BusinessDay

NNPC joins bid for Exxonmobil asset sale, insist on right of first refusal

Nigeria will produce 2.2m bpd of oil in 2023 – Kyari

The Nigerian National Petroleum Company(NNPC), Limited has informed Mobil Producing Nigeria Unlimited insisting on exercising the right of first refusal over the $1.6bn oilfield asset sale to Seplat Energy Offshore, a wholly-owned subsidiary of Seplat Energy Plc.

BusinessDay confirmed sources that the Group Managing Director and Chief Executive Officer(CEO) of NNPC, Mele Kyari written a letter to Exxonmobil, indicating its resolve to take over Exxonmobil share of the assets.

BusinessDay has yet to see the letter multiple sources confirmed the situation.

Seplat had last week announced that it has entered into an agreement to acquire the entire share capital of Mobil Producing Nigeria Unlimited (“MPNU”) from Exxon Mobil Corporation, Delaware for the operations of its onshore and shallow water assets for $1.2bn

NNPC’s decision to join the deal could scuttle Seplat plan. The state-oil firm is contending that as a joint partner, it should have the right of first refusal over any asset sale. However, the ExxonMobil’s position was that this a share sale rather than an asset sale.

The seal which awaits ministerial consent now gets murky and leaves the first investment under the new Petroleum Industry Act under a cloud of uncertainty.

Read also: Here’s what Wood Mackenzie says as Seplat acquires ExxonMobil’s Nigeria JV business

NNPC had indicated its intention to match any offer by interested parties for the assets following ExxonMobil decision to receive bids for their share of the JV. Seplat Energy subsequently put forward a winning bid for the assets and reached an Agreement with ExxonMobil.

According to Seplat, the transaction will create one of the largest independent energy companies on both the Nigerian and London Stock Exchanges, and bolster Seplat Energy’s ability to drive increased growth, profitability and overall stakeholder prosperity

‘‘Based on 2020 pro forma working interest volumes for Seplat Energy and MPNU, the transaction delivers 186 per cent increase in production from 51 barrels per day to 146 barrels per day, 170 per cent increase in 2P liquids reserves, from 241 MMbbl to 650 MMbbl

Other deliverables of the deal are; 14 per increase in 2P gas reserves from 1,501 Bscf to 1,712 Bscf, plus significant undeveloped gas potential of 2,910 Bscf (JV: 7,275 Bscf), 89 per cent increase in total 2P reserves from 499 MMboe to 945 MMboe and includes offshore fields with dedicated, MPNU-operated export routes offering enhanced security and reliability.