Seplat Energy Advances in Acquisition of Exxon Mobil’s Nigerian Unit as Legal Hurdles Clear
Seplat Energy PLC, a leading Lagos-based oil and gas company with significant operations in Nigeria, is on the verge of a strategic expansion following the resolution of a legal dispute that paves the way for its acquisition of a key stake from Exxon Mobil Corp. The company is eyeing a stake in Mobil Producing Nigeria Unlimited (MPNU), marking a significant move in the Nigerian and broader African energy sector.
The legal proceedings that had been a stumbling block for the deal involved the Nigerian National Petroleum Co Ltd and Mobil Producing Nigeria along with its affiliates. The dispute centered around the intended divestment of Exxon Mobil’s shares in MPNU to Seplat, a transaction that had been closely watched by the market. With the withdrawal of the case, the path is now clear for Seplat Energy to proceed with the acquisition, signaling a potentially transformative development for the company and its stakeholders.
Seplat Energy has expressed its satisfaction with the outcome, highlighting the collaborative effort of all parties involved to reach a resolution. “Seplat Energy commends the open cooperation and progress achieved by all stakeholders, and will diligently engage all key stakeholders, including the government, in progressing towards a swift completion of the acquisition of MPNU,” the company stated. This acquisition is seen not only as a milestone for Seplat but as a testament to the favorable investment climate and the constructive role of dialogue in advancing corporate transactions in Nigeria.
In a strategic move announced in February 2022, Seplat Energy disclosed its intention to purchase Exxon Mobil’s shares in MPNU for a sum of USD1.28 billion. This acquisition is aimed at incorporating the entire offshore shallow water business of ExxonMobil in Nigeria into Seplat’s portfolio. The company outlined a comprehensive financing plan for the deal, involving existing cash resources and credit facilities, supplemented by a USD550 million loan facility and a USD275 million offtake facility.
The market has responded positively to the news of the legal resolution and the advancing acquisition, with Seplat’s shares experiencing an uptick. Shares rose 3.4% to 198.04 pence each in London trading following the announcement, reflecting investor optimism about the company’s growth prospects through this strategic expansion. Meanwhile, Exxon Mobil’s shares saw modest movements in New York trading, underscoring the broader market interest in this development.
This acquisition represents a significant step for Seplat Energy in consolidating its position in the Nigerian energy sector and expanding its operational footprint. By integrating MPNU’s assets and capabilities, Seplat aims to enhance its production capacity, operational efficiency, and market reach, thereby providing added value to its shareholders and contributing positively to Nigeria’s energy industry. The transaction also exemplifies the dynamic nature of the oil and gas sector in Africa, highlighting the opportunities and complexities involved in major corporate deals.
As Seplat Energy moves forward with this acquisition, the company is set to embark on a new chapter in its growth story, with the potential to redefine its market presence and impact in the Nigerian and regional energy landscape.
