Nigeria has approved Exxon Mobil Corp.’s sale of its onshore oil and gas assets to local energy supplier Seplat Energy Plc, marking the conclusion of a lengthy two-year delay for the $1.3 billion transaction. However, a similar sale proposed by Shell Plc was rejected, presenting a significant setback for the company in its operations within the country.
The approval for Exxon’s transaction was confirmed by Gbenga Komolafe, CEO of the Nigerian Upstream Petroleum Regulatory Commission, during a conference in Abuja. President Bola Tinubu had indicated in his Independence Day speech on October 1 that the approval would come swiftly.
This decision allows Exxon to concentrate on expanding its offshore operations in Nigeria, the continent’s largest crude producer. The company has announced plans to invest up to $10 billion in these offshore ventures in the coming years. Seplat anticipates that acquiring Exxon’s assets will nearly quadruple its oil production to over 130,000 barrels per day.
In contrast, Shell’s attempt to sell its onshore assets to a consortium of Nigerian companies, known as Renaissance, for over $1.3 billion failed to gain regulatory approval. The consortium includes ND Western, Aradel Energy, First E&P, Waltersmith, and Petrolin, all local firms. Shell has been attempting to exit these assets for more than three years due to mounting operational challenges and environmental complaints from local communities.
The rejection of Shell’s sale underscores ongoing complexities in Nigeria’s oil sector, which faces scrutiny over environmental practices and the impact of oil theft.