The acquisition plan of ExxonMobil’s 40 per cent interests in all the joint venture assets with the Nigerian National Petroleum Company Limited (NNPC), by top indigenous exploration and production company – Seplat Petroleum Development Plc now Seplat Energy Plc, is experiencing hiccups as its partner in the transaction has pulled out, The Business Intelligence Africa (TBI Africa) has learnt.
Seplat’s partner – Trident Energy, it was gathered, withdrew from the deal because its financier, Warburg Pincus, that backed it at the beginning of the business later developed cold feet about committing huge capital to African oil and gas, especially in a high-risk jurisdiction like Nigeria.
Trident may also have deemed the execution risk too high, given the propensity of national oil company, NNPC, which is the senior partner in the assets to be acquired, to oppose the deal on the long run. NNPC holds 60 per cent in the joint venture oil assets in which ExxonMobil is divesting its 40 per cent interests. Therefore, NNPC has right of first refusal in the deal and may withdraw its approval at any point in the deal.
Besides, Trident Energy being a relatively young company having been established in 2016 with headquarters in London, doesn’t have the financial muscle to go alone on the transaction and had depended on Warburg Pincus for financing.
The over $67 billion worth Warburg Pincus, an American New York-based private equity firm, having considered investing in the ExxonMobil’s Nigerians oil assets high risk, back-pedaled and rendered Trident Energy helpless.
Efforts to get Seplat’s financing alternative in view of its partner’s withdrawal were futile as its officials didn’t respond to calls and short messages sent to them.
However, an energy analyst stated that as a publicly quoted company in Nigeria and United Kingdom, Seplat can raise funds from the capital market to augment the cash it has at hand to acquire the assets, noting that the transaction, if closed successfully, is a profitable one.
Also an industry source who is close to the deal, told our reporter that presently ExxonMobil has other companies that submitted bids for the acquisition but the American oil giant has soft spot for Seplat.
The source noted that if not for the pull out of the Warburg Pincus-backed Trident Energy, Seplat has concluded it had won the bid and had started making takeover arrangement including securing accommodation for its staff members that would be deployed to Ibeno, Eket based ExxonMobil base in Akwa Ibom, Nigeria.
Meanwhile, other contenders in the bid are still trudging on strongly and firmly.
ExxonMobil is giving up its 40 per cent operated interests in shallow water blocks in oil mining leases (OMLs) 67, 68, 70 and 104, and pipelines, among others.
These assets are said to contain reserves of around 400 million barrels of oil (mmbbl), with gross 2P and 2C gas reserves of 12 trillion cubic feet (tcf), with gross 2019 production of 276,000 barrels per day (bpd).
