In a significant development for Nigeria’s oil and gas sector, the government has given the final nod to Seplat Energy’s $1.28 billion purchase of ExxonMobil’s onshore assets, closing a deal that has faced over two years of regulatory scrutiny.
This approval, confirmed by Gbenga Komolafe, CEO of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), at an event in Abuja on Monday, marks a pivotal moment in the transition of onshore oil operations to indigenous firms.
The deal, first revealed in February 2022, had been stuck in a complex web of regulatory approvals, including those from the NUPRC.
The breakthrough came following President Bola Tinubu’s declaration on October 1 that the transaction was nearing final ministerial endorsement, paving the way for Seplat’s acquisition of key onshore assets.
Under the terms of the agreement, Seplat Energy will acquire a 40% stake in four oil mining leases, along with crucial infrastructure like the Qua Iboe export terminal.
Additionally, Seplat will take a 51% share in the Bonny River natural gas liquids recovery plant, previously held by ExxonMobil’s Nigerian subsidiary, Mobil Producing Nigeria Unlimited.
This expansion solidifies Seplat’s position as a major player in Nigeria’s energy sector, underscoring the government’s intent to promote indigenous participation in its oil and gas industry.
The acquisition is part of a broader trend that has seen international oil companies such as ExxonMobil, Eni, and Equinor divesting from Nigeria’s onshore oil fields. These oil majors have faced challenges such as theft, sabotage, and environmental concerns, which have made onshore operations less profitable.
Many have shifted their focus to deep offshore fields, which offer higher returns and fewer operational disruptions.
In July, NUPRC also approved the sale of Eni’s onshore assets to Oando and Equinor’s to the newcomer Project Odinmim, indicating a steady exit of international players from the onshore market.
As the Nigerian government continues to prioritize faster regulatory approvals for asset sales, it has imposed conditions to hold oil companies accountable for environmental degradation.
In May, NUPRC introduced a policy that requires oil majors to take responsibility for oil spills and compensate affected communities before securing approvals for asset transfers.
This move is aimed at addressing the long-standing issues of environmental damage in oil-producing regions, a major concern for communities that have often been left to bear the brunt of oil-related disasters.
With the completion of the ExxonMobil-Seplat transaction, Nigeria is positioning itself for a more localized oil sector, where indigenous companies will play a larger role in shaping the future of the country’s energy landscape.
This shift could potentially reinvigorate onshore production and reduce the influence of international oil majors, but it also places significant pressure on local firms to tackle the operational challenges that have plagued the sector for years.
The deal signifies a new chapter for Seplat Energy, which now has the opportunity to expand its influence in Nigeria’s upstream market. However, it also serves as a reminder of the enduring complexities within Nigeria’s oil and gas industry, where regulatory, environmental, and operational hurdles continue to shape the course of its evolution.