Seplat Energy (SEPLAT.LG), opens new tab is pursuing a swift conclusion to its $1.28 billion acquisition of ExxonMobil’s (XOM.N), opens new tab Nigerian shallow water oil assets, it said on Friday after being notified that NNPC had halted a legal challenge to the deal.
State oil company NNPC had challenged Exxon’s sale of the assets to Seplat, saying it had first right of refusal. The deal was further held up by regulatory issues.
“Seplat Energy commends the open cooperation and progress achieved by all stakeholders, and will diligently engage (with) all key stakeholders, including the government, in progressing towards a swift completion of the acquisition,” a Seplat statement said.
An NNPC spokesperson was unable to provide immediate comment.
Analysts have said that the Exxon-Seplat deal would inject much-needed capital into Nigeria’s oil industry, potentially leading to improved output. It would also signal to investors that similar deals, such as Shell’s asset sale to Renaissance in January, are likely to gain regulatory approval.
Nigeria, Africa’s biggest oil producer, relies on crude oil for more than 90% of its foreign exchange and half its budget. However, output has declined in recent years owing to underinvestment and theft.
Oil majors operating in Nigeria, including Shell (SHEL.L), opens new tab and TotalEnergies (TTEF.PA), opens new tab, have been exiting their onshore shallow water operations to focus on deepwater drilling operations.