NNPC objects to Exxonmobil $1.6bn oilfield asset sale

By Adewale Sanyaolu

In a dramatic twist, the Nigerian National Petroleum Company(NNPC),Limited has cancelled Mobil Producing Nigeria Unlimited $1.6bn oilfield asset sale to  Seplat Energy Offshore, a wholly owned subsidiary of Seplat Energy Plc.

According to a letter signed by the Group Managing Director and Chief Executive Officer(CEO) of NNPC, Mr. Mele Kyari and addressed to Exxonmobil, NNPC reiterated its resolve to take over Exxonmobil share of the assets. “We are aware that you reached an agreement to divest from onshore and shallow waters JVs,” the NNPC stated “clearly that we are interested.”

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This announcement was coming barely one week after Seplat 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 $1.2billion

NNPC’s decision effectively means that the Sales Agreement between Seplat and ExxonMobil may have to be reviewed.

According to industry observers, the NNPC which is the major shareholder in the Joint Ventures with ExxonMobil, may have exercised its right of first refusal on the assets as part of a new era which will focus solely on building the long term profitability of the NNPC Ltd.

It was learnt that NNPC had formerly conveyed its decision to exercise its rights and match any offer by interested parties for the assets following ExxonMobil decision to receive bids for its share of the JV.


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Seplat Energy subsequently put forward a winning bid for the assets and reached an Agreement with ExxonMobil.

Right of pre-emption is a legal right to parties in a join t venture to be the first to be considered for any planned sale or takeover of assets in the JVs if either parties choose to trade them off.

Seplat had while announcing the agreement to buy the assets clearly stated that the completion of the transaction is subject to Ministerial Consent and other required regulatory approvals.

With the cancellation, it is expected that NNPC would be required by terms of the joint venture JOA, to fully match the offer of the winning bid.

Seplat Energy, the company that made the winning bid was reported  to have  staked $1.583 billion for the deals to acquire the entire share capital of MPNU plus contingent consideration, noting that the asset transfer will wait for minister’s assent. This means that the state owned oil firm must not, based on its exercise of right of first refusal, pay below the $1.583 billion mark.