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Seplat: Our $1.3bn deal with ExxonMobil on hold — NNPC secured court order against it

Seplat: Our $1.3bn deal with ExxonMobil on hold — NNPC secured court order against it
July 11
16:08 2022

Seplat Energy Plc says the Nigerian National Petroleum Company (NNPC) has won a court injunction restraining ExxonMobil Corporation from selling its assets in Nigeria. 

In February 2021, Seplat Energy Plc agreed to acquire the entire share capital of Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil for $1.3 billion.

There had been reports that the NNPC intend to exercise a right of pre-emption on ExxonMobil’s planned sale of the MPNU assets in Nigeria.

But Seplat Energy said its deal with ExxonMobil was valid and subsisting.

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In May, the federal government declined to consent to the proposed acquisition due to “overriding national interest”.

In a statement on Monday, Edith Onwuchekwa, company secretary at Seplat, said an Abuja high court had granted the NNPC an “order of interim injunction” restraining ExxonMobil “from completing any divestment” in oil mining lease 68, oil mining lease 69, oil mining lease 70 and oil prospecting licence.

The statement added that the court barred MPNU and Mobil Development Nigeria Plc from disposing of their shares in the joint operating agreement (JOA) between them and the NNPC.

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“Seplat Energy PLC recently became aware that, on 5 July 2022, the Nigerian National Petroleum Company Limited (“NNPC”) commenced an action at the State High Court of the Federal Capital Territory in Abuja, Nigeria (“State High Court”) in relation to the acquisition of the entire shares of Mobil Producing Nigeria Unlimited (“MPNU”),” the statement reads.

“MPNU, its shareholders (Mobil Development Nigeria, Inc. and Mobil Exploration Nigeria, Inc.), and the Nigerian Upstream Petroleum Regulatory Commission are named as defendants in the suit.

“NNPC has requested the State High Court to declare that a dispute has occurred between itself and MPNU in relation to the interpretation of pre-emption rights under their Joint Operating Agreement (“JOA”) and order NNPC and MPNU to arbitration as required by the JOA.

“On 6 July 2022, the State High Court made an ex parte order of interim injunction restraining the Defendants from completing any divestment in MPNU, including the Share Sale and Purchase Agreement signed with Seplat Energy Offshore Limited (the “SPA”).”

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Seplat Energy, which is not a party to the lawsuit, reiterated that the deal is still valid and subsisting, and the “company remains confident that the matter will be brought to a proper conclusion in accordance with the law. Any further information will be provided if available to the Company and permitted by law”.

For more than a decade, International oil companies (IOCs) have divested their assets to local oil companies due to operational difficulties, crude oil theft, and climate targets, among others. 

In March 2022, a court of appeal in Owerri stopped Shell from selling any assets in Nigeria until a decision is reached in an oil spill penalty suit. 

Shell Plc had suspended its divestment plan pending the outcome of the case at the supreme court.

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