The Nigerian National Petroleum Company Limited (NNPC) has discontinued its legal action against Mobil Nigeria subsidiaries, clearing the path for their $1.28 billion sale to Seplat Energy Offshore Limited.
The application, which was presented by the company’s legal counsel Afe Babalola & Co., on June 11, 2024, requests the court to grant leave for discontinuance and to strike out the suit, with the provision to relist it should the settlement process fail.
“The applicant humbly urges Your Lordship to grant leave to discontinue this suit and consequently strike it off the court’s cause list,” the motion read.
“Granting this application aligns with the policy of this Honourable Court and facilitates the finalization of the settlement process.”
This move follows the initial suit filed by the company in July 2022, which was referred to arbitration by the court on August 3, 2022.
Last month, pressure from President Bola Tinubu, following two high-level visits from ExxonMobil’s top shots, intervened in the impasse in the international oil company’s asset sale to Indigenous heavyweight, Seplat Energy Plc.
The settlement agreement stated: “Mobil Producing Nigeria Unlimited (MPNU) shareholders will consent to Seplat providing the Share Sale and Purchase Agreement to NNPC to finalize their transaction.
NNPC will withdraw all interim orders and the substantive suit against MPNU and other defendants.
“The parties will jointly discontinue arbitration proceedings upon completion of the transaction. MPNU shareholders and NNPC will align their positions to finalize their respective transactions with Seplat.
“NNPC’s legal team highlighted that the discontinuance aligns with Order 24 of the High Court of the Federal Capital Territory Civil Procedure Rules 2018 and is crucial for the settlement’s completion.
The court’s decision on the motion will be pivotal in resolving the longstanding dispute, enabling the parties to focus on finalizing the divestment.”
The agreement was signed by Mele Kyari, NNPC CEO, and Shane Harris, managing director of MPNU. With the settlement agreement, ExxonMobil and Seplat can now formally approach the Nigerian Upstream Regulatory Commission (NUPRC) to seek the consent of the Federal Government.
Africa Oil & Gas Report, an energy intelligence publication, said NNPC Ltd will keep 70 percent of the stake in the resulting Joint Venture when the sale and purchase transaction between ExxonMobil and Seplat Energy is concluded.
“The proposed NNPC – Seplat 70:30 Joint Venture would be the highest stake by the Nigerian state in a JV-producing asset since the government reduced its 80 percent share in the Shell NNPC Joint Venture to 55 percent in 1989, to incentivize international partners (Shell, TOTAL, and ENI) for the Nigerian Liquefied Natural Gas project,” the intelligence publication said on Thursday.
NNPC holds between 55 percent and 60 percent in Joint Venture assets that deliver over 80 percent of Nigerian production.
The $1.3 billion deal between ExxonMobil and Seplat Energy involved the acquisition of a 40 percent stake in MPNU, which includes four oil mining licenses, more than 90 shallow-water and onshore platforms, and 300 producing wells.
ExxonMobil is reducing its presence in Africa’s biggest oil-producing country, shrinking its office space and scaling back operations in the country.
Exxon has reportedly vacated its large office in Lagos, opting for a smaller, more centralised location. Similar downsizing is expected in other Nigerian cities where the company has a presence.