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Saturday, October 1, 2022

#Why Buhari Reversed Approval On Mobil/ Seplat Deal.

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Headlinenews.news gathered that President Muhammadu Buhari reversed his approval of the acquisition of ExxonMobil Corporation assets by Seplat Energy Plc because of initial confusion triggered by the failure of the “various agencies involved in (the) deal to coordinate well among themselves”.

It would be recalled that on Monday, President Buhari approved the acquisition of ExxonMobil Corporation assets by Seplat Energy Plc despite moves by the state-owned oil company, Nigerian National Petroleum Company Limited (NNPC) and the Nigerian Upstream Petroleum Regulatory Commission (NURPC) to block the deal.

But in a twist of events, the NUPRC frowned at the approval, describing it as a regulatory matter.

In another twist, Garba Shehu, the presidential spokesperson, disclosed on Wednesday that the president has reversed the approval.

Shehu said the President has decided to support the position of the NUPRC in the deal.

He said previous confusion was because “various agencies involved in (the) decision had not coordinated well among themselves”.

In May, the commission declined to approve the proposed acquisition due to “overriding national interest”.

It would be recalled that ExxonMobil entered into a landmark Sale and Purchase Agreement with Seplat Energy to acquire the entire share capital of Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation, Mobil Development Nigeria Inc, and Mobil Exploration Nigeria Inc. earlier this year.

The transaction suffered a setback after the state-owned Nigerian National Petroleum Corporation Limited asserted a right of first refusal on the deal. As a joint venture partner, NNPC argued it retained the right to be allowed to buy oil blocks sold by ExxonMobil ahead of any competitor or private firm.

Seplat Energy in July said NNPC Ltd. won a court decision to block its quest to purchase the entire oil assets of Mobil Producing Nigeria Unlimited (MPNU), a local unit of oil major ExxonMobil.

The court decision on July 6 was temporary and forbade MPNU and the defendants from consummating any asset disposal in MPNU, not excluding the share sale and purchase deal it struck with Seplat in February.

NNPC had prayed the court, State High Court of the Federal Capital Territory, to declare that a conflict happened between the state-owned oil company and MPNU over the “interpretation of preemption rights under their Joint Operating Agreement (“JOA”) and order NNPC and MPNU to arbitration as required by the JOA.”

Seplat Energy said neither itself nor Seplat Energy Offshore Limited was a party in the lawsuit, and insisted the share purchase agreement remained valid. The asset purchase would enable Seplat Energy to scale up production by 95,000 barrels of oil a day from assets in a joint venture ExxonMobil runs with NNPC.

In a corporate filing on Wednesday, Seplat Energy said it followed due process in the acquisition of the assets.

“Seplat Energy has become aware of news and social media reports alleging impropriety in the process of securing ministerial consent to the acquisition of Mobil Producing Nigeria Unlimited by Seplat Energy Offshore Limited,” the statement reads.

“Such reports are wholly untrue, and the company will pursue legal action against any parties involved in disseminating false information related to its business.”

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