NNPC Objects To Exxonmobil $1.6bn Oilfield Asset Sale

In a dramatic twist, the Nigerian National Petroleum Company (NNPC), Limited has cancelled Mobil Producing Nigeria Unlimited $1.6bn oilfield asset sale to Seplat Energy Offshore, a wholly owned subsidiary of Seplat Energy Plc.

According to a letter signed by the Group Managing Director and Chief Executive Officer (CEO) of NNPC, Mr. Mele Kyari and addressed to Exxonmobil, NNPC reiterated its resolve to take over Exxonmobil share of the assets.

“We are aware that you reached an agreement to divest from onshore and shallow waters JVs,” the NNPC stated “clearly that we are interested.”This announcement was coming barely one week after Seplat announced that it has entered into an agreement to acquire the entire share capital of Mobil Producing Nigeria Unlimited (“MPNU”) from Exxon Mobil Corporation, Delaware for the operations of its onshore and shallow water assets for $1.2billion. NNPC’s decision effectively means that the Sales Agreement between Seplat and ExxonMobil may have to be reviewed.

According to industry observers, the NNPC which is the major shareholder in the Joint Ventures with ExxonMobil, may have exercised its right of first refusal on the assets as part of a new era which will focus solely on building the long-term profitability of the NNPC Ltd.

IMF Asks Nigeria to Consolidate on Fiscal Position

The International Monetary Fund (IMF) has said Nigeria’s fiscal position is not very strong at the moment despite the volatility in the local and international markets, a reason it said the federal government should consolidate the fiscal position to avoid damaging risks.

“We need to be on record saying this: that you need to consolidate on your fiscal position. And the consolidation needs to be through mobilizing more tax revenues because spending is very, very low, particularly on social and infrastructure. You need to spend more in our view. So, for that, mobilising tax revenue is of the excess.”

IMF country representative to Nigeria Ari Aisen said yesterday at a hybrid event on the opportunities and imperatives for business. The event was organized by the American Business Council in partnership with KPMG Nigeria.

The event focused on the opportunities in 2022, plans by the Federal Government for the private sector, and reforms that will drive developments via investments beyond 2022. The IMF said Nigeria needs more financing to be able to actually meet those expending targets that do not have access to finance.