ExxonMobil-Seplat deal, others to increase Nigeria’s oil output by 21.4% – Experts

Financial Markets

THERE were indications that the conclusion of the $1.28 billion ExxonMobil-Seplat divestment deal and other similar deals in the upstream segment of Nigeria’s oil industry would increase oil output by 21.4 per cent to more than 1.7 million barrels per day, bpd.

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President Bola Tinubu said yesterday in his independent day national broadcast, that the ExxonMobil-Seplat deal would be signed by the government in few days time.

According to the Organisation of Petroleum Exporting Countries, OPEC, Nigeria produced 1.4 million bpd, excluding condensate in August 2024.

However, in different interviews with Vanguard, yesterday, experts said the addition of between 300,000 bpd and 400,000 bpd condensate and additional output from ExxonMobil and Agip, which has already been taken up by Oando could raise Nigeria’s output to about 1.7 million bpd.

Giving this hint, the National President of Oil and Gas Service Providers Association of Nigeria, OGSPAN, Mazi Colman Obasi, said: “The ExxonMobil/Seplat deal has been on the drawing board for a while. It is therefore a good development to conclude it as soon as possible, especially it would very likely lead to increased oil and gas production.”

Another expert that pleaded to be anonymous said: “This would enable Nigeria to hit its future budget targets. The nation had based the 2024 budget at 1.7 million bpd, including Condensate and $77 per barrel. But it has been struggling to meet the target throughout the first half of the year.”

The transaction, which involves Seplat Energy acquiring the entire share capital of Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil for $1.28 billion, has been the subject of legal disputes.

The Nigerian National Petroleum Company (NNPC) Limited initially filed a lawsuit to block the deal on July 5, 2022, leading to the referral of the transaction to arbitration by the court on August 3, 2022.

However, following a directive from the president to the ministry of state for petroleum resources (oil) and NNPC on May 28, a settlement agreement was signed on May 30, resolving the divestment issue and clearing the way for the approval of the Seplat and ExxonMobil deal.

In his Independence Day address on Tuesday, President Tinubu emphasised that the transaction is in line with the government’s commitment to promoting free enterprise while upholding the integrity of regulatory processes.

“Our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes,” Tinubu said.

“This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively.

“As such, the ExxonMobil-Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.”