Seplat Energy is making a bold move into the Nigerian oil production space by completing the acquisition of Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil. This strategic purchase, which was first announced in 2022, positions Seplat Energy as one of Nigeria’s most significant independent energy companies. Experts believe this acquisition will reshape the country’s oil and gas industry and drive future growth for Seplat Energy.
The completion of the deal, valued at $800 million, marks a significant turning point for Seplat Energy. Though the original value was pegged at $1.28 billion, the final cash consideration stands at $672 million, with an earlier deposit of $128 million made in 2022. The indigenous energy giant said it funded the deal was from its available cash and debt facilities.
“Seplat Energy is committed to creating value for stakeholders while contributing to Nigeria’s future prosperity,” the company said in a statement. This acquisition, which includes MPNU’s oil fields and related infrastructure, adds substantial reserves and production capacity to Seplat Energy’s portfolio. With MPNU’s assets, the company has secured an impressive 409 million barrels of 2P reserves and an additional 670 million barrels of 2P+2C reserves.
Seplat Energy strengthens operations in Nigeria
Seplat Energy is now the operator of several key oil and gas assets. These include a 40% operated interest in OML 67, 68, 70, and 104, as well as a 40% operated interest in the Qua Iboe export terminal and the Yoho Floating Production Storage (FSO). Seplat also assumes a 51% operated interest in the Bonny River Terminal (BRT) NGL recovery plant, which is crucial for Nigeria’s gas production and export activities.
This strategic acquisition expands Seplat Energy’s footprint in both onshore and shallow water Nigeria. The company now holds equity in 11 blocks and has access to 48 producing oil and gas fields, five gas processing facilities, and three export terminals. Seplat Energy plans a significant increase in production capacity, with about 6 million barrels per day of oil and gas output by mid-2024.
The transition of MPNU’s assets to Seplat Energy is not just about expanding production capacity. It also involves bringing over 1,000 employees and 500 contractors into the Seplat Group. Seplat Energy Chairman Senator Udoma Udo Udoma expressed his excitement about the acquisition, welcoming MPNU employees to Seplat.
“We are excited to begin our journey in a new region of the country,” said Udoma. “We look forward to replicating the positive impacts we’ve achieved within our communities in our current areas of operations.”
CEO Roger Brown also expressed confidence in Seplat Energy’s future. “We have acquired a company with one of the best portfolios of assets in a world-class basin,” Brown said. “Our commitment is to invest in increasing oil and gas production while maximizing value for stakeholders.”
Industry experts react to Seplat Energy’s acquisition
Industry experts have praised Seplat Energy for its strategic acquisition. According to energy analyst Chijioke Okeke, “Seplat Energy is positioning itself as a major player in Nigeria’s energy sector. This acquisition provides Seplat with the right mix of assets to grow production while driving profitability.”
Experts also point out that Seplat’s acquisition of MPNU aligns with Nigeria’s broader energy strategy to develop local companies that can drive the country’s oil and gas sector forward. “This move could help reduce the country’s dependence on international oil companies,” said oil and gas expert Dr. Tunji Bakare. “Seplat Energy’s expansion ensures that Nigeria retains a larger share of its oil revenue.”
Seplat Energy’s immediate priority is ensuring a smooth transition of MPNU’s employees and contractors into the Seplat Group. The company also plans to ramp up production at MPNU’s underutilized assets, including its export terminals and over 600 wells. Currently, only 30% of the wells are in production.
Ikay Ogunmwonyi, Seplat Energy’s Director of Production, said, “The terminal itself is designed for 600,000 barrels per day, but it’s currently underutilized. There’s a lot of work being done to optimize production.” With significant investment and strategic planning, Seplat Energy aims to unlock the full potential of the acquired assets.
Seplat’s next steps involve leveraging its expanded asset base to drive more sustainable growth, in line with its mission to provide affordable, reliable energy to Nigeria. Insider sources say the company will focus on maintaining safety standards, operational excellence, and strong relationships with regulators, the government, and local communities.
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