Nigeria has approved Exxon Mobil Corp.’s sale of its onshore oil and gas assets to domestic energy company Seplat Energy Plc, while rejecting a similar deal involving Shell Plc.
The decision brings a conclusion to Exxon’s $1.3 billion transaction after more than two years of delay, but it halts Shell’s plans to divest its onshore assets in the West African country.
Gbenga Komolafe, CEO of the Nigerian Upstream Petroleum Regulatory Commission, announced the approval of Exxon’s deal during a conference in Abuja, Nigeria’s capital, on Monday. The deal received ministerial consent from President Bola Tinubu, who also serves as Nigeria’s minister of petroleum. In his Independence Day address on October 1, Tinubu indicated that the deal would be finalized within days.
The sale allows Exxon to shift focus toward expanding its offshore assets in Nigeria, Africa’s largest oil producer. Last month, the company revealed plans to potentially invest up to $10 billion in its offshore operations over the coming years. Seplat has previously stated that acquiring Exxon’s onshore assets could nearly quadruple its oil output to more than 130,000 barrels per day.
Meanwhile, a similar deal by Shell Plc to sell its onshore assets to a consortium of local companies, valued at over $1.3 billion, did not receive government approval. The consortium, known as Renaissance, includes Nigerian firms ND Western, Aradel Energy, First E&P, Waltersmith, and Petrolin, and is led by Tony Attah, a former Shell employee with 30 years of industry experience.
Shell has been attempting to exit its onshore operations in Nigeria for over three years, facing growing challenges, including accusations from local communities that the company is responsible for oil spills that have polluted the environment. While Shell has blamed oil theft and damage to infrastructure for many of these incidents, the company is in ongoing discussions with the government to complete the asset sale, according to a spokesperson.
The approval of Exxon’s deal marks a major step forward for the energy sector in Nigeria, while Shell’s rejection presents a setback for the company as it continues to navigate the complexities of its exit strategy from onshore operations.
