ExxonMobil's Nigeria sale inches forwards

ExxonMobil's long-delayed sale of its Nigerian shallow-water oil and gas business to London-listed Seplat is one step closer, with the US major having agreed a settlement with state-owned NNPC that removes a legal obstacle to a regulatory review of the deal.

Exxon agreed the $1.58bn divestment, for its 40pc stake in more than 90 shallow-water and onshore platforms, in February 2022. The assets generate around 95,000 b/d of oil equivalent (boe/d).

Completion has been delayed by a dispute over pre-emption rights provided for in an NNPC-Exxon joint operating agreement, and the state-owned firm got a court injunction blocking the deal in July 2022.

Ministerial approval, appearing to ignore the court injunction, was first granted and then withdrawn in August 2022.

Nigerian upstream regulator NUPRC said at the start of May that Exxon and NNPC would have to reach a settlement before a review could be conducted or any recommendation for its approval submitted to the petroleum minister. Before recommending any deal for ministerial approval, the regulator said it has to determine if intending buyers have the financial resources and technical expertise to manage their acquisition targets, and whether sellers or buyers will be responsible for environmental remediation, host community obligations and decommissioning liabilities.

NUPRC also said the government had set 31 August as a deadline to clear Nigeria's backlog of unapproved upstream deals.

NNPC did not reveal the terms of today's settlement, which comes after Nigeria's president Bola Tinubu, who doubles as petroleum minister, and his two junior petroleum ministers met ExxonMobil upstream president Liam Mallon and its Nigerian business' managing director Shane Harris on 28 May.

"[The] president has given a clear directive to [NNPC's chief executive Mele Kyari] and I to resolve the issue of divestment, and we are doing whatever we can to achieve that", junior minister Heineken Lokpobiri said at the meeting.

By Adebiyi Olusolape