Energy
ExxonMobil-Seplat Shares Deal: Has NNPC Misfired?
ARTICLE by Josiah Adewale
An exciting deal
The business world and corporate Nigeria, especially the oil and gas industry, was literally lit and agog following the announcement by Seplat Energy Plc., a leading indigenous energy company listed on the Nigerian Exchange and the London Stock Exchange, and Exxon Mobil Corporation, Delaware, USA (ExxonMobil) that they had entered into an agreement for the Seplat to acquire the entire share capital of Mobil Producing Nigeria Unlimited (MPNU) from the latter, subject, however, to the usual Ministerial Consent.
The President, ExxonMobil Upstream Oil and Gas, Liam Mallon, said the company sold its equity interest in its shallow-water business, Mobil Producing Nigeria Unlimited (MPNU), to Seplat Energy through Seplat’s wholly-owned Seplat Offshore.
Rendering highlights of the deal, which is the first of its kind since the coming on stream of the Petroleum Industry Act (PIA), Seplat, on its part, put the purchase price at $1,283 million plus up to $300 million contingent consideration.
The transaction, it said, would create one of the largest independent energy companies on both the Nigeria Stock Exchange and London Stock Exchange as well as bolster Seplat Energy’s ability to drive increased growth, profitability and overall stakeholder prosperity, delivering 186 per cent increase in production from 51,000 bpd to 146,000 bpd or 170 per cent increase in 2P liquids reserves, from 241 MMbbl to 650 MMbbl.
In addition, it was expected to deliver a 14 per cent increase in 2P gas reserves from 1,501 Bscf to 1,712 Bscf, plus significant undeveloped gas potential of 2,910 Bscf (JV: 7,275 Bscf).
Nigerians are excited as they await the final Ministerial Consent to bring such strategically important national assets fully into Nigerian ownership alongside the Nigerian National Petroleum Corporation, NNPC, the exiting Joint Venture Partner. This is in line with government’s objective to achieve a pragmatic, progressive and just energy transition for Nigeria.
In its incisive analysis, Wood Mackenzie (WoodMac), a global and reputable intelligence provider that empowers decision-makers with unique insights on the world’s natural resources, lauded the deal saying it was a win-win for Seplat, ExxonMobil, and the Nigerian government, offering huge upside for oil and gas.
Very instructively, Mackenzie added: “Because this is a corporate acquisition, NNPC has no rights to pre-empt a deal under the Joint Operating Agreement (JOA), which governs the JV. This means that ministerial consent would be the only hurdle remaining, although nothing can be taken for granted.
A Misinterpretation of Joint Venture Agreement
Unfortunately, amid this local and international acclaim, the NNPC appears strangely more interested in throwing spanner in the works. In a move to block the transaction, the NNPC, as widely reported in the media, has through its Group Managing Director (GMD), Mele Kyari, written to MPNU, notifying it of its intention to exercise a Right of Pre-emption over the deal.
“We are aware that you reached an agreement to divest from onshore and shallow waters JVs…. Clearly we are interested”, the GMD was quoted as stating.
Meanwhile, a recently published article in support of NNPC’s action quoted purported oil industry source of affirming NNPC’s rights under the law, to exercise such pre-emptive powers.
NNPC hinges its move on a June 28, 1990 Joint Operating Agreement between it and Mobil Producing Nigeria as it pertains to ‘Participating Interest”.
Regarding transfer and assignment of interest, Article 19.4 provides: Subject to sub-clauses 19.1 and 19.2, if any Party has received an offer from a third Party, which it desires to accept, for the assignment or transfer of its participating hereunder (the “Transferring Party”), it shall give the other Party prior right and option in writing to purchase such Participating Interest as provided in sub-clauses 19. 4.1 to 19 .4.2.
Sub-clause 19.4.1 provides: The Transferring Party shall first give notices to the other Party, specifying therein the name and address of the aforementioned third Party and the terms and conditions (including monetary and other consideration) of the proposed assignment and transfer.
Sub-clause 19 .4.2 states: “Upon receipt of the notice referred to in Sub-clause 19. 2.1, the other Party may within thirty (30) days thereafter, request in writing the assignment and transfer of such Participating Interests to it, in which event the assignment or transfer shall be made to it on the same or equivalent terms”.
Meanwhile, these provisions could not be read or understood in isolation of the definition of a “Participating Interest” by the same Agreement.
Article 1.24 states: “Participating Interest means the undivided by percentage interest from time to time held by the Parties in the concession (s), the Joint Property and rights and obligations under this Agreement, namely: sixty per cent (60%), in case of NNPC; and forty (40 per cent), in the case of Mobil”.
Thus, these provisions clearly show that the NNPC is absolutely mixing things up because the transaction that happened between Seplat and ExxonMobil, Delaware, USA, was nothing close to a transfer of a “Participating Interest”.
No! Seplat did not deal with Mobil Nigeria producing Unlimited (MNPU). Rather, it transacted business with ExxonMobil, Delaware, the parent company, which acted within its rights, as it pleased and in line with its business/investment strategy, to dispose of all its shares in MNPU, which owns the said assets in Nigeria.
This is the major fact NNPC needs to get right so it could stop convoluting a very simple matter and making Nigeria a laughing stock before the international business community, as it visibly has no Right of First Refusal (RFR) to exercise on this transaction.
Matters arising
In any case, the ExxonMobil-Seplat transaction is not the first in the industry in recent times. Many have wondered why the NNPC did not exercise the same pre-emption action in the divestments by SPDC.
Of recent, the NNPC, and analysts pushing its case have argued that with its transition into a registered profit-making and limited liability company vide the PIA, it was out to reshape and optimise its portfolio by acquiring assets with high performance, low vulnerability and huge gas potential. For this reason, it prioritises the acquisition of divested assets under MPNU JV over those in Shell Petroleum Development Company (SPDC) JV.
In other words, NNPC‘s sudden interest in the deal and taking over the entire JV (if it had the legal backing) is all about the attractiveness of the assets in question. As a government-backed entity, is it not supposed to be more interested in taking over perceived more vulnerable assets with higher security and production issues? If it is only interested in ‘juicy’ fleshes of the oil and gas industry, who does it expect to deal with the hard bones?
Worse, it is not even as if the NNPC is known to run these things by itself. Most Nigerians know how and where these portfolios end up.
Besides, the NNPC does not enjoy popularity as one of the managers. If the NNPC were to be an airline, it is to be wondered how many Nigerians would be confident to fly in its planes. If NNPC were a hospital, how many Nigerians would surrender their lives to it to manage?
As the sole importer of fuel, Nigerians are still dealing with not only intermittent biting fuel scarcity, but they are also yet to recover from the importation of toxic fuel that have wrecked vehicles and put households through hardships.
Worse, the NNPC is yet to tell Nigerians how the nation’s daily fuel consumption jumped from about 30 million litres about seven years ago to about 102 million litres and above.
Under NNPC’s watch, the refineries have degenerated from producing enough for local consumption, to producing little, and now nothing.
In 2020, NNPC recorded N10.27 Billion in operational expenses without refining a single drop of fuel. It is unable to fix any of the refineries, even with the award of a USD1.5 Billion contract last year to fix the Port Harcourt refinery.
The NNPC has been struggling to meet its statutory obligations to the Federation Account in recent years. Despite the surge in oil prices in the international market, it was unable to remit anything to the Federation Account in January 2022, making it the second time within a year, as it was the case in April 2021.
In fact, with a deficit of approximately N2 Trillion out of its projected N2.511 Trillion, NNPC was only able to disburse N542 billion as against the N2.511 Trillion it was budgeted to contribute. The Nigeria Governors Forum have protested the development.
Therefore, many Nigerians have wondered why a debt-burdened NNPC is so quick to accumulate more debts vide the $5 billion corporate finance commitment from the African Export-Import Bank (Afreximbank) to “acquire, invest and operate energy-producing assets in Nigeria as part of NNPC’s growth strategy following its incorporation as a limited liability company”. It is important to note that unlike other businesses that would secure their loans by their assets, NNPC rides on government’s back.
The question of prioritisation of gas
Meanwhile, it is reported that NNPC’s interest in taking 100 possession of the assets in question was informed by its efforts not to risk a another partner on the NNPC MPNU JV that might not see the monetisation of the assets gas component as a priority.
This should not even be considered given Seplat’s profile in gas investment and its leading role in Nigeria’s energy transition.
It produced 20,758 boepd gas in 2021 and supplies 30 per cent of gas to power Nigeria. It became the first company to record a 50-50 venture with the NNPC through the Seplat/NNPC gas plant project – ANOH Gas Processing Company (AGPC) where Seplat easily raised $260 Million through a consortium of banks to fund its part of $650 Million financing for the ANOH Gas Processing Plant.
Against these backdrops, it is understandable why industry players believe that the NNPC has not only misfired, but is also overreaching itself, playing up those needless interferences that discourage investors. It should retreat.
*Adewale is an energy analyst
The Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) said it has observed with deep concern the rising tension within the downstream oil and gas industry and the possibility of an industrial action that could disrupt national petroleum supply and distribution.
As responsible stakeholders in this vital sector of the Nigerian economy, Olufemi Adewole, executive secretary, DAPPMAN, said they recognize the central importance of industrial harmony to the stability of the industry, the protection of jobs, and the sustenance of revenues accruable to the nation.
He said that the potential impact of any strike on ordinary Nigerians, businesses, and government finances cannot be overstated.
“DAPPMAN therefore appeals to all parties involved to exercise utmost restraint and embrace constructive dialogue as the most effective means of resolving disagreements.
“In particular, DAPPMAN calls for the urgent intervention of the Federal Government in addressing the concerns of all aggrieved persons.
“We firmly believe that engagement at the roundtable will yield lasting solutions and prevent avoidable disruptions in the sector.
“Our Association’s consistent position has always been to collaborate with government, labour unions, investors, and other critical stakeholders to create a win-win situation that sustains investment, protects workers’ rights, and guarantees an uninterrupted supply of petroleum products nationwide.
“We humbly urge all parties to sheath their swords, avoid actions that could escalate the situation, and allow room for negotiations that will address concerns in a fair, balanced, and sustainable manner. “The Depot and Petroleum Products Marketers Association of Nigeria remains committed to playing a constructive role in facilitating peace, cooperation, and progress in the oil and gas sector for the ultimate benefit of Nigeria and her citizens.’
Energy
PTD Mocks NUPENG Over Empty Threats To Dangote, Tells Drivers To Ignore Nationwide Strike Notice On Monday
The Petroleum Tanker Drivers (PTD) has ridiculed the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) over its escalating leadership crisis, and for its lack of coordination and wisdom to peacefully mitigate the cold war between the union and the management of Dangote refinery.
The tanker drivers also called for the immediate arrest of the leaders of NUPENG by law enforcement agents especially the Inspector General of Police and the Director-General of DSS so as to allow peace in the country and make Nigerians embark on their daily and legitimate businesses without any fear or molestation.
They also urged petroleum tanker drivers across the four zones of the country to ignore the nationwide strike notice issued by NUPENG which was scheduled to take effect on Monday, September 8, 2025. The PTD leaders stressed that such insensitive move by NUPENG will cripple the economic activities in the country, impoverish the masses and further cause them more pain, contrary to the sentiments whipped up by the union.
PTD also chided the parent body of unduly meddling in the progress and success of the country’s economic powerhouse, just as it described the leaders as economic saboteurs who have no interest of the country at heart but to continue in the old order of manipulating the system through illegal levies at depots, tank farms, and refineries that are never accounted for under the current leadership.
The tanker drivers also expressed worry over NUPENG’s inability to maintain a cohesive leadership structure, emphasizing that while the Union struggles with factional disputes, Alhaji Aliko Dangote and his business partner, Alhaji Sayyu Idris Dantata of MRS remained focused on revitalising the country’s petroleum industry downstream sector and delivering on President Bola Tinubu’s Renewed Hope Agenda.
In their well detailed observations, PTD also mocked the double standards posture of NUPENG leaders, claiming that the Union was known for waging a vicious war against the Association of Distributors and Transporters of Petroleum Products (ADITOP) and preventing them to run side by side with them (NUPENG) in the petroleum industry ecosystem, saying the union lacks the moral rectitude to accuse Dangote and Dantata of championing monopoly in the petroleum industry.
PTD equally maintained that union membership anywhere in the world is voluntary and that the crisis arising from the plan by the Dangote refinery to import 4,000 compressed natural gas-powered trucks for the direct distribution of fuel to retailers is in good shape and in best interest of the masses.
The tanker drivers however advised the Federal government, the NSA, National Assembly, DSS, Inspector General of Police, NSCDC, and other industry stakeholders not to treat the matter with kid gloves so that NUPENG will not undermine the relative peace and progress the Oil and Gas sector is currently enjoying.
A statement by PTD stakeholders jointly signed by comrades (Alhaji) Tajudeen Abubakar (Kaduna Zone), Chief (Mrs.) Blessing Dafinone (Warri Zone), Comrade Joseph Dagogo-Jack (JP) (Port Harcourt Zone) and Comrade Kolade Fadahunsi-Ojelabi (Lagos Zone), reads in parts:
“This is a clarion call to all Petroleum Tanker Drivers across Nigeria to please ignore the strike notice issued by NUPENG leadership. The purported notice suggested that the industrial action will take effect on Monday, September 8, 2025, this is obviously insensitive, callous, and unacceptable. How could NUPENG condescend so low like this that they didn’t even dim it necessary to explore any option of negotiation or stakeholders dialogue before arriving at this? This is not only laughable but wicked. A Union is expected to be socially responsible and not pursue selfish gains capable of ruining the socio-economic accomplishments of the country.
“It is no news that the leadership of NUPENG lacks operational and administrative understanding of how the industry works, but we would be glad to educate them that union membership anywhere in the world is voluntary and that the crisis arising from the plan by the Dangote refinery to import 4,000 compressed natural gas-powered trucks for the direct distribution of fuel to retailers is in good shape and in best interest of the masses. Negotiations and symbiotic relationship cannot be reached through violence, threats or arrogance, Nigeria is governed under constitutional democracy, these union leaders should note that very carefully.
“This is the same NUPENG that has created protracted internal crisis within its rank that is calling Alhaji Aliko Dangote and Alhaji Sayyu Idris Dantata names, infact these businessmen should sue them for libel and defamation. This also show lack of decorum, and rascally behaviour of today’s leaders in NUPENG, they don’t think or make legal consultations before acting on highlighted highly sensitive matters and situations.
“It is also illogical and unreasonable for NUPENG to accuse Dangote and Dantata of promoting monopoly in the industry while they, in their double standards have been at loggerheads with the Association of Distributors and Transporters of Petroleum Products (ADITOP) and preventing them from running their affairs side by side with them in the petroleum industry ecosystem. This is crass irresponsibility from a union that lacks integrity.
“Can any sane human being call NUPENG President Williams Akporeha, General Secretary Afolabi Olawale, and the National Trustee Otunba Salimon Akanni Oladiti Saints? Under their watch the once respected union is now a shadow of its former self. These individuals further put themselves into an imperceptible ridicule and shame by saying Dangote is involved in anti-union activities. They should have gone ahead to issue suspensions to Dangote Refinery and MRS as they did to Comrade Lucky Osesua and his supporters, and most recently to Comrade Alex Agwanwor and others too.
“These set of NUPENG leaders have used the instruments of their offices to unlawfully bully, intimidate, victimize and harass both members and staff of the union in all the four zones in Nigeria to an extremely high and embarrassing level, to the extent that in the eyes of the public, NUPENG is now being subjected to shame, total disgrace, and has become a laughing stock to the rest of the world especially the Ministry of Labour and Employment, Industrial Courts, ILO, IndustriALL and so on.
“Afolabi and Akporeha’s consistent mistreatment of staff and members across the zones have regrettably led to significant psychological distress for the targeted individuals. It’s a heartbreaking reality, but many people feel conquered, helpless, and powerless when confronted with these abnormalities in the union. What a shame! while NUPENG struggles with factional disputes at different branches and at the centre, Alhaji Aliko Dangote and his business partner, Alhaji Sayyu Idris Dantata of MRS are firmly focused and revitalising the country’s petroleum industry downstream sector and delivering on President Bola Tinubu’s Renewed Hope Agenda.
“We understand that NUPENG unionised petrol station workers known with the acronym, PSW, meanwhile the tank farm owners pay them heavily at the point of ship discharging products; what is the value added to members from these monies collected especially from the PTD Branch? None! They sit in offices, collect dues and levies in billions, without looking after drivers on wheels. Many of the tanker drivers receive less than 50k in a month as salaries, and in some worse situations, they are still being owed their monthly salaries. When it is time to go for local and international training and seminars, it is the National executives who are in the comfort of their air-conditioned offices that will attend, they consistently deny the main drivers the opportunity to gain knowledge and skills necessary to safely operate the tankers within the framework of minimum safety standards.
“PTD under the current leadership of NUPENG, has failed serially to support the clamping down on criminal elements who had developed a penchant for illegal oil bunkering and other unlawful activities that promote economic sabotage in the country. Similarly, they lack the capacity and wisdom to put necessary measures in place to curb products shortage and stealing, which have ruined businesses of many Petroleum marketers. Tanker drivers have suffered incessant harassment and bullying of its members from several state and non-state actors, NUPENG cannot find any solution to these and many other burning issues. They have also failed to foster industrial peace and harmony. All these make us laugh when we now see Afolabi and Williams calling hard working and law-abiding Nigerians like Dangote and Dantata unprintable names. We sincerely advice Dangote and Dantata to sue NUPENG for libel or defamation.
“It is really heartbreaking to see that NUPENG has recorded the highest number of lawsuits, with an average of 50 cases, many of which were filed by former staff, expelled, or suspended members of the union. Infact the judiciary is even tired of their approach to many of the cases and worst still the union has been reprimanded several times and slammed with contempt charges, fines and retribution.
“NUPENG in their statement claimed they will mobilize forces, which forces are they going to mobilize? Their stooges and surrogates? The forces they could have mobilized are the ones they unlawfully pushed aside and thought they could do without. In reality the likes of Comrades Lucky Etuokwu, Lucky Osesua, Dayyabu Garga; Peter Muodobelu, Humble Obinna Power; Akinolu Olabisi; Godwin Nwaka; Tiamiu Sikiru Ojo; Abdulmumuni Shaibu, Sylvanus Idanwekhai, Sunday Ezeocha, Osamuyi Osahon, and others remain the best hands that can shape the future of PTD & NUPENG and sustain industrial harmony amongst industry stakeholders for the greater good of Nigeria, socio-economically.
“Honestly Dangote and Sayyu should be commended by Nigerians for providing jobs and breaking the long existing monopoly in the Nigeria’s petroleum industry value chain and for the courage of giving drivers on wheels their place of pride and bringing dignity to the industry.
“We therefore use this rare opportunity to humbly advise the Federal government, NSA, National Assembly, DSS, Inspector General of Police, NSCDC, and other industry stakeholders to call for the immediate arrest of leaders of NUPENG especially the President and the General in order to prevent them from setting the country on fire at a time Nigeria is experiencing relative peace in the oil and gas sector. Enough of NUPENG highhandedness, no union is bigger than the extant laws and constitution of the Federal Republic of Nigeria. NUPENG has failed its members and should never be allowed to destroy Nigeria and its economic activities”, the statement concluded.
Nigeria continues to grapple with the economic, environmental, and social costs of gas flaring despite its status as one of Africa’s top producers of natural gas.
Recent data reveals that in 2024 alone, the country flared natural gas valued at $1.05 billion, equivalent to electricity generation potential of 30.1 thousand GigaWatt hours, enough to drastically reduce the nation’s chronic power shortages.
The penalties associated with gas flaring, estimated at $602 million, remain largely unenforced, raising concerns about regulatory weakness and ineffective oversight.
The Nigerian government has introduced several policies, including the Petroleum Industry Act (PIA) and the Gas Flaring, Venting & Methane Emissions (Prevention of Waste and Pollution) Regulations, 2023, aimed at tackling this menace. Additionally, the Nigerian Gas Flare Commercialization Project (NGFCP) was launched as a market-based solution to allocate flared gas to third-party investors for industrial and power sector use. Yet, implementation challenges have stifled progress.
In an exclusive commentary on the issue, Dr. Saheed Abudu, a researcher and lawyer specializing in Energy and Natural Resources Law and International Investment Law, and former researcher at the Tulane Center for Energy Law, described gas flaring as a symptom of Nigeria’s regulatory inertia. “If Nigeria is to truly end this wasteful practice, it must look beyond its borders and learn from the successful blueprints of other oil and gas powerhouses. The framework of the NGFCP is theoretically sound, but without strong enforcement and political determination, it risks becoming another unfulfilled policy,” Dr. Abudu said.
He noted that the persistent lack of political will, overreliance on International Oil Companies (IOCs), and repeated shifting of flare-out deadlines undermine Nigeria’s credibility. “The continuous revisions of flare-out deadlines—from 2025 now extended to 2030—together with the reluctance of producers to pay fines, underscore a regulatory environment that has failed to hold operators accountable. These delays communicate that compliance is optional,” he emphasized.
Dr. Abudu further highlighted deep-rooted institutional problems. “Significant bottlenecks persist, including administrative delays, overlapping regulatory mandates, and above all, resistance from producers who see flare gas utilization as disruptive to their core oil operations. Inadequate infrastructure for gas gathering and distribution compounds the problem, making many flare sites commercially unviable without massive upfront investments,” he explained.
Drawing comparisons with other resource-rich nations, Dr. Abudu argued that Nigeria must adopt proven strategies. He explained that Norway adopted a top-down approach where no gas utilization plan meant no project approval, and combined this with a stringent carbon tax that forced companies to innovate and invest in capture technologies. Saudi Arabia, through its state-owned oil giant Saudi Aramco, pursued a national strategy that treated gas as a resource, not waste. With a master gas gathering plan and billions invested in infrastructure, flaring was phased out, reflecting the level of corporate-level commitment Nigeria has lacked. Angola, he added, offers the most relevant case for Nigeria. After decades of flaring, Angola rolled out its National Gas Master Plan, partnered with international investors, and, with World Bank support, built the infrastructure needed to monetize gas. Their progress, he said, proves that resource stewardship is possible with political will and foreign partnerships.
Dr. Abudu outlined a roadmap Nigeria could adopt to reverse its losses and position itself as a competitive gas economy. “Nigeria must transition to stricter enforcement of regulations, making flare penalties genuinely punitive rather than symbolic. No new oil project should proceed without a credible gas utilization plan. The government must also act as a catalyst, as Angola did, by incentivizing investment in gas infrastructure and ensuring that producers cannot simply evade their obligations,” he stressed.
He added that empowering third-party investors to participate in gas commercialization is key, but this requires deliberate policies to strengthen the domestic gas market. “The government must make the Nigerian gas market more competitive and attractive for investors. Incentives, security of investments, and legal certainty are crucial. Without these, potential investors will continue to shy away, leaving the problem unresolved,” he said.
Experts agree that ending gas flaring is not just about environmental sustainability but also about unlocking economic potential. If properly harnessed, flared gas could power industries, create jobs, and generate billions in revenue. Dr. Abudu concluded with a stark warning: “The flames burning across the Niger Delta are not merely an environmental hazard; they represent wasted economic opportunities and human development potential. Nigeria cannot afford to treat gas flaring as business as usual. It must move from rhetoric to decisive action.”
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