In a landmark move that could reshape the landscape of Nigeria’s oil industry, Seplat Energy is on the verge of concluding its acquisition of ExxonMobil’s Nigerian shallow water oil assets, valued at a colossal $1.28 billion. This development comes after the Nigerian National Petroleum Corporation (NNPC) withdrew its legal challenge against the sale, which had cited a first right of refusal.
The transaction, which had been ensnared in regulatory entanglements, now sees a path to swift completion. Seplat Energy has expressed its commitment to engaging with all key stakeholders, including the government, to expedite the process. While an NNPC spokesperson was not immediately available for comment, the industry is abuzz with the prospects of this deal.
Analysts are optimistic, suggesting that the Exxon-Seplat transaction will infuse much-needed capital into a sector that has been beleaguered by underinvestment and theft, leading to a slump in output. The deal is also expected to serve as a beacon for future agreements, following in the footsteps of Shell’s asset sale to Renaissance earlier this year.
Nigeria, Africa’s largest oil producer, is heavily dependent on crude oil, which accounts for more than 90% of its foreign exchange and half its budget. However, the nation’s oil production has been on a decline, a trend that this acquisition could potentially reverse.
The move by Seplat Energy is indicative of a shift towards local companies acquiring assets from international oil majors, signalling a transition to a more domestically-driven industry. This could herald a new era of increased investor confidence and a resurgence in the country’s oil sector, which is crucial for Nigeria’s economic growth and stability.
