The Nigerian National Petroleum Company (NNPC) Limited has finalized a settlement agreement with ExxonMobil Nigeria regarding the proposed sale of its entire stake in Mobil Producing Nigeria Unlimited to Seplat Energy Offshore Limited.

The document which read, Settlement agreement between NNPC Ltd. and Mobil Producing Nigeria Unlimited, Mobil Development Nigeria Inc., and Mobil Exploration Nigeria Inc. signed regarding the proposed divestment of a 100% interest in Mobil Producing Nigeria Unlimited to Seplat Energy Offshore Limited, comes as a major win for Seplat, which has been eager to expand its portfolio and solidify its position as a dominant player in Nigeria’s oil industry, Africa’s largest oil producer.

The $1.28 billion deal, first announced in February 2022, has been entangled in regulatory hurdles for over two years.

Here’s the journey so far of the Seplat/Exxonmobil deal;

February 2022 – Seplat announced that it had bought the entire offshore shallow water business of ExxonMobil in Nigeria for $1.2 billion.The company said it agreed to acquire the entire share capital of Mobil Producing Nigeria Unlimited (MPNU) from Exxon Mobil Corporation.

May 2022 – The federal government, through the Nigerian Upstream Regulatory Commission (NUPRC), declined its consent to the proposed acquisition of oil and gas assets belonging to the MPNU by Seplat Energy.The government, among others, cited overriding national interest as one of the reasons for rejecting the deal.

July 2022 – Seplat reported that NNPC had secured a court injunction preventing ExxonMobil from selling its assets in Nigeria.

“Seplat Energy PLC recently became aware that, on 5 July 2022, the Nigerian National Petroleum Company Limited (“NNPC”) commenced an action at the State High Court of the Federal Capital Territory in Abuja, Nigeria (“State High Court”) about the acquisition of the entire shares of Mobil Producing Nigeria Unlimited (“MPNU”).

However, even with the settlement agreement with ExxonMobil Nigeria regarding the proposed sale of its entire stake in Mobil Producing Nigeria Unlimited to Seplat Energy Offshore Limited, this move does not signify a full departure from Nigeria, as ExxonMobil continues to hold substantial investments in the country through its upstream affiliates operating there.

Here is a breakdown of ExxonMobil’s remaining assets in Nigeria:

Esso Exploration and Production Nigeria Limited (Offshore East)

In early 2014, EEPNL (Offshore East) Limited took over the operatorship of Usan, a deepwater oil field in OML Block 138 (formerly OPL 222), from Total E&P Nigeria Limited. Usan was discovered in February 2002, with the first oil achieved in February 2012.

The initial partners in the Usan field were EEPNL, Chevron Petroleum Nigeria Limited, with 30 percent stakes each, Total E&P Nigeria Limited and Nexen Petroleum Nigeria Limited with 20 percent each.

Total E&P Nigeria Limited, the former operator, sold its 20 percent stake in OML 138 to Sinopec and relinquished operatorship of Usan on January 3, 2013. Also, China National Offshore Oil Corporation (CNOOC) acquired Nexen’s share.

Following NNPC’s approval and the signing of a Transition Support Agreement with Total on November 27, 2013, EEPNL officially took over as the operator of the Usan field. ExxonMobil’s ownership is still  unchanged.

Esso Exploration and Production Nigeria Limited (EEPNL)

Esso Exploration and Production Nigeria Limited (EEPNL) was founded in 1993 as a subsidiary of Exxon Corporation. That same year, the Nigerian National Petroleum Corporation (NNPC) awarded EEPNL a Production Sharing Contract for Oil Prospecting Lease (OPL) 209, now known as OML 133.

EEPNL operates the Erha deepwater oil and gas project, which began production in early 2006.

In 1999, EEPNL confirmed a major discovery at Erha, with a well drilled to 3,745 meters and a flow rate of 2,800 barrels per day. By 2000, development planning for Erha, located 100 kilometres off the Nigerian coast, was complete.

Erha can now produce 150,000 barrels of oil and process 315 MMSCF of natural gas daily, with an estimated recovery of 500 million barrels of oil.

EEPNL holds a 56 percent stake in OML 133, with Shell Nigeria Exploration and Production Company (SNEPCO) holding the remaining 44 percent. In addition, EEPNL owns a 20 percent interest in the Bonga development on OML 118, discovered in 1996 and produced since 2004, with about 200,000 barrels per day.

Bonga SW, a recent discovery in the same OML, shows significant production potential. EEPNL also has a 30 percent interest in the Usan field.