Nigeria Approves $1.3B Sale Of Exxon Onshore Assets To Seplat, Rejects Shell Deal

Nigeria approved Exxon Mobil Corp.’s sale of its onshore oil and gas assets to domestic energy supplier Seplat Energy Plc, but rejected a similar deal by Shell Plc.

The decisions end a more than two-year delay to the conclusion of Exxon’s $1.3 billion deal, but hinders Shell’s plans for the West African nation.

The Exxon transaction has received ministerial consent, said Gbenga Komolafe, CEO of the Nigerian Upstream Petroleum Regulatory Commission at a conference in Abuja, the nation’s capital on Monday.

President Bola Tinubu, who is also the minister of petroleum, signaled in his Independence Day speech on Oct. 1 that it would get approval within a matter of days.

The sale will free Exxon Mobil to focus on expanding its offshore assets in Africa’s largest crude producer. The company last month said it is considering investing as much as $10 billion in that business in the coming years.

Seplat has previously said that acquiring Exxon’s assets would almost quadruple the company’s oil output to more than 130,000 bpd.

A similar transaction by Shell Plc to sell its onshore assets to a consortium of local companies for more than $1.3 billion failed to get approval, Komolafe said.

A Shell spokesperson wasn’t immediately able to comment.

The consortium, known as Renaissance, is formed of exploration and production companies ND Western, Aradel Energy, First E&P, Waltersmith and Petrolin, all of which are based in Nigeria. Its CEO Tony Attah is a former Shell employee with 30 years of experience in the oil and gas industry.

Shell said last week in an emailed statement that it was engaged in ongoing talks with the government to sell the assets and will provide the regulator with all information needed to complete the approval process.

The rejection will be a setback for Shell, who has sought to exit the assets for more than three years as the operations have become increasingly difficult, with local communities accusing the company of being responsible for oil spills that have polluted their environment.

The company has blamed many of these incidents on damage to infrastructure caused by oil theft.

Source: World Oil