Nigerian President Muhammadu Buhari approved Seplat Energy’s $1.28 billion purchase of Exxon Mobil’s shallow water business in the West African country, seemingly putting an end to efforts by the national oil company to block the deal.
Buhari, who also serves as oil minister, consented to the transaction due to the “extensive benefits” it will bring to Nigeria’s energy sector and larger economy, his spokesman Femi Adesina said in an emailed statement on Monday. The decision clears the way for Seplat to complete an agreement announced in February to acquire four permits from Exxon.
The Nigerian National Petroleum Co. (NNPC) had tried to block the sale and take over the permits itself. A court in the capital, Abuja, granted the state-owned company an interim injunction on July 6 barring Exxon from selling the subsidiary that holds the assets, according to a statement published last month by Seplat.
A spokeswoman for Exxon declined to comment while Seplat and the NNPC did not immediately respond to requests for comment. Buhari’s statement did not mention NNPC’s efforts to acquire the blocks.
The acquisition will give Seplat, which is listed in London and Lagos, additional production of about 95,000 barrels of oil equivalent from the shallow-water permits that Exxon operates in a joint venture with the NNPC. That would almost triple the company’s output.
The sale would also see Exxon exit onshore and shallow water activities in Nigeria. For more than a decade, international oil companies in Africa’s largest crude producer have been offloading large parts of their portfolio in the country to domestic players, a trend that has recently accelerated.
An order from a Nigerian court has forced Shell Plc to pause its plans to sell all of its remaining onshore permits in the country.