After a prolonged two-year wait, Exxon Mobil’s anticipated $1.28 billion asset sale to Seplat Energy is poised for approval by Nigeria’s oil regulator.
The deal, which has been in limbo since 2022, could finally see the light of day following recent communication from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
Gbenga Komolafe, the chief of NUPRC, revealed to Reuters on Thursday that the regulatory body is on the verge of giving its consent to the transaction.
Komolafe disclosed that Exxon Mobil and Seplat Energy are scheduled to attend a pivotal meeting on Friday, during which they will discuss the final steps towards approval.
He expressed optimism, stating, “Subject to the outcome of the meeting, consent… could be given in less than two weeks from the date of the meeting.”
According to Komolafe, NUPRC will present the companies with two mutually exclusive options, the acceptance of which would pave the way for the deal’s approval.
While he didn’t delve into specifics, he emphasized that Nigerian law mandates provisions for decommissioning, host community development, and environmental remediation.
“We don’t want our nation to carry unwarranted financial burdens arising from the operations of the assets over time by the divesting entities,” Komolafe asserted, underscoring the importance of responsible asset management.
The $1.28 billion sale holds immense significance for Nigeria’s oil industry, which has faced challenges stemming from underinvestment and security concerns in recent years.
With oil majors like Shell and TotalEnergies divesting from onshore shallow water operations due to security issues, regulatory approval of the Exxon-Seplat deal could inject much-needed capital into the sector.
Analysts view the impending approval as a potential catalyst for improved oil output in Nigeria. Moreover, it could serve as a positive signal to investors, paving the way for similar deals in the future.
The regulatory clearance of Shell’s asset sale to Renaissance in January has further bolstered expectations regarding the viability of such transactions.
As Nigeria looks to revitalize its oil sector and attract investment, the imminent approval of Exxon Mobil’s asset sale to Seplat Energy marks a significant milestone, bringing an end to a prolonged period of uncertainty and setting the stage for renewed growth and stability in the country’s vital energy industry.