Buhari backtracks on approval of $1.28bn Seplat’s ExxonMobil acquisition deal

President Muhammadu Buhari has reversed his approval of Seplat Energy’s purchase of ExxonMobil’s Assets, it has emerged.

The reversal is coming barely 48 hours after a purported statement was issued by the President ‘s spokesman, Me Femi Adesina that the deal had been approved by the President

Seplat Energy Plc had in February this year announced an agreement to acquire the entire share capital of Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation, Delaware for $1.28bn.

The transaction entails the acquisition of ExxonMobil Nigeria’s entire offshore shallow water business.

According to the deal, ExxonMobil Nigeria’s shallow water business is an established, high-quality operation with a highly skilled local operating team and a track record of safe operations.

The Nigerian National Petroleum Company Limited has a pre-emptive right over the asset and had last month won a court decision temporarily blocking Exxon Mobil Corporation from selling assets in Nigeria to Seplat Energy Plc.

A Judge in Abuja had granted NNPC an “order of interim injunction” on July 6, 2022, barring Exxon Mobil “from completing any divestment” in a unit that ultimately operates four licenses in Nigeria.

Despite the verdict of the Court, reports emerged on Monday that President Muhammadu Buhari had approved that the deal be consummated by Mobil and Seplat.

The Presidency’s announcement of the approval of the deal took many industry players by surprise because the transaction had initially been declined on July 5 this year by the President who is himself the Minister of Petroleum Resources.

But reacting to the development, the President ‘s Spokesperson Garba Shehu told Premium Times  that the President has taking a decision that the position of the Nigerian Upstream Petroleum Regulatory Commission be supported.

He said the earlier confusion was because “various agencies involved in (the) decision had not coordinated well among themselves.”

“It has become clear that the various agencies involved in the decision had not coordinated well among themselves and having looked at all of the facts with all of the ramifications, the president decided the position of the regulator is to be supported.”

Sources within the Presidency said on Monday that there are extant laws governing such transactions, arguing that this statutory mandate lies within the purview of the Nigeria Upstream Petroleum Regulatory Commission.

One of the Presidency sources with knowledge of the transaction had revealed that the President had on July 5 issued a directive to the NNPC Limited to proceed with the acquisition of 40 per cent interest of ExxonMobil.

The source who said the approval by President Buhari still subsists, argued that that the President cannot suddenly reverse himself on a transaction of such magnitude.

The top government official said, “This must have been an unauthorised statement as there are extant laws governing such transactions and this statutory lies within the purview of the Nigeria Upstream Petroleum Regulatory Commission.

“For the avoidance of doubt, Mr. President’s directive to NNPC Limited to acquire 40 per cent interest of ExxonMobil still subsists and this was further reinforced by Mr. President on Friday, 5th July 2022.”

Another competent source with knowledge of the deal said that based on the provisions of the Petroleum Industry Act, any announcement about an industry transaction can only be made by the regulator, which in this case is the Nigeria Upstream Petroleum Regulatory Commission, The Whistler reported

“This (purported statement) is at variance with the PIA. The Nigeria Upstream Petroleum Regulatory Commission should be the one to announce. As such the General public is advised to disregard the purported statement.”

It was gathered from another top government official that following a request by the NNPC Ltd, the President had approved that NNPC should proceed with the pursuit of its rights under the Joint Operating Agreement of the NNPC/MPNU Joint Venture through the legal processes available to NNPC Limited.

“Mr. President as Minister of Petroleum Resources sustains his earlier approval for the decline of the share transfer request by Mobil Producing Nigeria Unlimited. It will be doubtful if something else was announced after the approval,” another source said.

The Chief Executive of the NUPRC, Gbenga Komolafe had clarified that the Commission in line with the provisions of the Petroleum Industry Act 2021 is the sole regulator in dealing with such matters in the Nigerian upstream sector.

In a statement personally signed by Komolafe on Monday, the NUPRC boss stated that issue at stake is purely a regulatory matter and the Commission had earlier communicated the decline of Ministerial assent to ExxonMobil in this regard.

In line with the decline of Ministerial assent, he said the Commission that the status quo must remain.

The statement reads, “The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) affirms that status quo remains in respect of ExxonMobil/Seplat Energy share acquisition.

“The Chief Executive of the NUPRC Engr. Gbenga Komolafe clarified that the Commission in line with the provisions of the Petroleum Industry Act 2021 is the sole regulator in dealing with such matters in the Nigerian upstream sector.

“As it were, the issue at stake is purely a regulatory matter and the Commission had earlier communicated the decline of Ministerial assent to ExxonMobil in this regard. As such the Commission further affirms that the status quo remains.

“The Commission is committed to ensuring predictable and conducive regulatory environment at all times in the Nigerian upstream sector.”

TheNewsmatrics reports that there are  suggestions that the deal was being pushed by some vested interests  and that a sum of $100m had been distributed to certain top government officials to facilitate a positive outcome.

Some sources said President Buhari had ordered the Department of State Services (DSS) to investigate the alleged $100m bribe payout.