Nigerian National Petroleum Corp. (NNPC) launched a legal case against ExxonMobil and Seplat Energy over the proposed sale.
Seplat confirmed the move this morning. NNPC filed at the State High Court in Abuja on July 5, the London-listed explorer said.
The case focuses on the sale of all the shares in Mobil Producing Nigeria Unlimited (MPNU), by its shareholders, Mobil Development Nigeria and Mobil Exploration Nigeria. The case also named the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) as a defendant.
© Supplied by Seplat EnergyNNPC asked the court to declare a dispute had arisen with MPNU over pre-emption rights, under the joint operating agreement (JOA). The court must order NNPC and MPNU into arbitration, NNPC said.
As a result, the court has issued an injunction pausing the sale of MPNU to Seplat.
The latter said it was not a party in the suit. Seplat considers the deal to still be valid, it said, expressing the belief that the deal would reach a “proper conclusion” in line with the law.
Seplat announced the agreement on February 25. At the time, the company predicted it would complete the deal in the second half of this year.
Crunching the numbers
Under the agreement, Seplat was to pay $1.28 billion to acquire Exxon’s entire offshore shallow water business in Nigeria. It said it may pay another $300 million, based on various contingencies. The assets produce 95,000 barrels of oil equivalent per day and have 445mn barrels in 2P reserves.
NNPC and MPNU work together in a joint venture, splitting equity 60:40. This covers OML 67, 68, 70, 104 and the Qua Iboe and Bonny River terminals.
Seplat, in mid-May, said NUPRC had declined to approve the sale of MPNU. Seplat has defended its acquisition of MPNU by saying the Exxon unit was not party to the deal. Rather, the company said, the deal was signed with MPNU’s shareholders. It has said it plans to continue running MPNU separately from the rest of its operations.
If NNPC is confirmed in its desire to pre-empt the sale, it is not clear that the company would be able to find the necessary funds.