ExxonMobil-Seplat transaction has been in the pipeline for years. Now, the Federal government has sanctioned the divestment of the US oil and gas major.
The Federal Government has finally approved the ExxonMobil-Seplat deal. Engr. Gbenga Komolafe, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), announced the decision. He revealed that the government processed five divestment applications but approved only four.
At an event celebrating the NUPRC’s three-year anniversary, Komolafe did not explain why the Shell-Renaissance deal was blocked. However, he emphasized the government’s commitment to regulatory compliance. This commitment aligns with the standards set under the Petroleum Industry Act (PIA), he said.
Komolafe stated, “We have processed four of the transactions, and four of them have received ministerial consent.”
The other approved transactions were:
- Equinor–Project Odinmim: Approved in line with the PIA and granted ministerial consent.
- Agip to Oando: Processed according to regulatory guidelines and approved.
- TotalEnergies’ 10 percent divestment to Telema Energies: Also approved with ministerial consent.
He further noted that this marks the first time a comprehensive regulatory framework has been implemented. This framework aims to ensure transparent divestment processes within Nigeria’s oil and gas sector.
Long awaited ExxonMobil-Seplat deal
The ExxonMobil-Seplat deal marks a significant moment in Nigeria’s oil and gas sector. It involves Seplat Energy acquiring ExxonMobil’s shallow water assets in Nigeria. These assets include key oilfields and production facilities.
This deal has been in the pipeline for several years. ExxonMobil aims to divest from its international holdings and focus on core operations. The Nigerian government encourages indigenous companies to take control of the country’s oil resources. This makes the Seplat acquisition timely and relevant.
The approval process for the ExxonMobil-Seplat deal faced hurdles. Regulatory scrutiny and market volatility delayed the transaction. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) worked to ensure compliance with the Petroleum Industry Act (PIA). This act promotes transparency and efficiency in the oil sector.
Implications of the deal
The regulatory framework aims to facilitate investments while protecting national interests. The ExxonMobil-Seplat deal serves as a test case for the PIA’s implementation. A successful conclusion could open doors for future transactions in Nigeria’s oil sector. It may signal a shift toward more local participation in an industry traditionally dominated by multinationals.
As the deal receives government approval, stakeholders are optimistic. They foresee increased production capacity, improved standard of living, reduced fuel prices, job creation, and enhanced revenue for Nigeria. The ExxonMobil-Seplat deal underscores a commitment to strengthening local expertise. It also aims to boost the oil and gas sector’s contribution to national development.
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