Following reports on the failed assets acquisition deal between Seplat Energy and ExxonMobil, the investigation has shown that the state oil company, the Nigerian National Petroleum Corporation, has made a mouth-watering offer to acquire the assets.
ExxonMobil and Seplat Energy had recently announced a $1.6bn sales agreement deal to see Seplat purchase ExxonMobil’s complete shares in the state-owned oil firm.
However, just when all hopes were high for the completion of the deal, a letter dated May 16, 2022, by the Nigerian Upstream Petroleum Regulatory Commission to ExxonMobil stated that the deal could no longer hold because the NNPC had exercised its right of pre-emption first refusal on the assets as part of a new era to focus solely on building the long-term profitability of the NNPC Ltd.
The right of pre-emption is a legal right to parties in a joint venture to be the first to be considered for any planned sale or takeover of assets in the JVs if either party chooses to trade them off.
According to findings, the NNPC objected to the sale of ExxonMobil’s equity to Seplat and insisted on exercising its first right of refusal. The Corporation made an offer above $1.6bn ExxonMobil.
The state-owned oil firm is the major shareholder in the Joint Ventures (JV) with ExxonMobil.
The NNPC will officially debut in July, and its bid to acquire ExxonMobil’s assets is part of the Corporation’s expansion plan.
Seplat Energy had made the winning bid, having staked $1.583bn for the deals to acquire the entire share capital of Mobil Producing Nigeria Unlimited plus contingent consideration, with the asset transfer waiting for the minister’s assent.
Group Managing Director Mele Kyari, and addressed to ExxonMobil, the NNPC reiterated its resolve to take over ExxonMobil’s share of the assets.
“We are aware that you reached an agreement to divest from onshore and shallow waters JVs,” the NNPC said in the letter, stating “clearly we are interested.”
The NNPC also reiterated, in the letter, that it had already transformed from being a corporation to being a profit-driven company and that it now could buy over the share of ExxonMobil in the Joint Ventures.
This means that the state-owned oil firm must have, based on its exercise of the right of first refusal, paid above the $1.583bn mark offered by Seplat. Sources disclosed that the Corporation must have parted with as much as $2 billion for the assets.
The NNPC recently announced a funding agreement with AFREXIM for up to $5 billion to grow its investment in new and existing upstream assets. Both Seplat and ExxonMobil declined to comment on the development.