NNPC, ExxonMobil seal $1.2 billion deal to boost Nigerian oil sector

The Nigerian National Petroleum Corporation (NNPC) and ExxonMobil have reached a landmark $1.2 billion divestment agreement, marking a significant milestone in their longstanding partnership. This deal is poised to have far-reaching implications for the Nigerian oil and gas industry.

The agreement involves the divestment of ExxonMobil’s entire interest in Mobil Producing Nigeria Unlimited to Seplat Energy Offshore Limited. This acquisition is anticipated to enhance NNPC’s portfolio and bolster its standing in the Nigerian energy sector.

“This transaction represents a strategic shift for ExxonMobil as we refocus our operations and prioritise investments in other regions,” stated a representative from ExxonMobil. “For NNPC, it is an opportunity to increase government revenue and stimulate economic growth in Nigeria.”

Negotiations had been stalled for nearly two years, but the parties have now reached a satisfactory agreement, concluding months of intense discussions. The deal is subject to regulatory approvals and is expected to be finalised in the coming months.

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Industry analysts have hailed the agreement as a significant achievement, emphasising that it underscores the commitment of both parties to fortify their partnership and drive growth within the Nigerian energy sector. “The $1.2 billion deal is a testament to the growing confidence in Nigeria’s oil and gas industry,” said an industry expert. “We expect this will attract further investments.”

The deal comes on the heels of a protracted dispute over the sale of ExxonMobil’s assets to Seplat Energy. The disagreement had severely impacted Nigeria’s oil production, reducing output from 600,000 barrels per day (bpd) to 120,000 bpd, and causing an estimated $30 billion in losses over two and a half years.

Also read: ExxonMobil/SeplatDeal: Confusion As NUPRC Overrides Presidency Over ExxonMobil/Seplat Energy Share Acquisition

Nigerian Minister of State for Petroleum, Heineken Lokpobiri, highlighted the economic implications of the dispute, stating, “Nigeria has lost approximately 480,000 bpd of crude oil production due to the crisis. With oil prices averaging around $80 per barrel during this period, the financial impact has been substantial.”

President Bola Tinubu’s intervention was pivotal in resolving the impasse, leading to the recent settlement agreement. The resolution is expected to restore production levels, potentially adding 480,000 bpd to Nigeria’s current output, significantly boosting the nation’s economy.

Also read: President Buhari Consented to ExxonMobil/Seplat Energy Acquisition

“The intervention of the President has yielded the desired results with the NNPC announcing the signing of a settlement agreement,” Lokpobiri added.

Seplat Energy has welcomed the development, with Chioma Afe, Director of External Affairs and Social Performance, describing it as a positive step. “What Exxon and NNPC announced is a step in the right direction and it is a positive outcome,” she said. “We are waiting for approvals to be finalised, especially with the regulators.”

As the deal progresses, industry observers will closely watch how NNPC and ExxonMobil leverage this new arrangement to foster growth and prosperity in Nigeria.

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