Mergers & Acquisitions

BREAKING: President Buhari gives consent to acquisition of Mobil Producing Nigeria by Seplat Energy

Picture: Presidency of Nigeria

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President Buhari has announced today that, in his capacity as Minister of Petroleum Resources, he was giving his consent to the acquisition of the entire share capital of Mobil Producing Nigeria Unlimited (MPNU) by Seplat Energy.

The President’s consent was seen as a surprise by many industry observers, especially after the NNPC Ltd sought to declare a dispute between itself and MPNU in relation to their interpretation of pre-emption rights under their joint-operating agreement (JOA). NNPC had notably received last month an ex-parte order of interim injunction from the State Hight Court of Abuja restraining MPNU from completing the transaction with Seplat Energy.

“Considering the extensive benefits of the transaction to the Nigerian Energy sector and the larger economy, President Muhammadu Buhari has given Ministerial Consent to the deal,” said the Nigerian Presidency in a tweet.

Seplat Energy has announced its cash acquisition of MPNU back in February 2022 for $1.283bn, in what remains one of the top oil & gas deals of the year globally.

By acquiring MPNU, the LSE and NSE-listed independent will take over Exxon Mobil’s entire offshore shallow water business in Nigeria which includes assets that are very rich in natural gas and gas liquids. The acquisition would increase Seplat Energy’s production by a whooping +186% while increasing its total 2P reserves by +89%.

The total portfolio includes a 40% operating ownership of OMLs 67, 68, 70 and 104 and their associated infrastructure. Combined, the assets produced an average of 177,000 boepd gross in 2021 according to NUPRC data. OMLs 67, 68 and 70 form what is known in Nigeria as the “East Area”, where ExxonMobil has executed some of the most successful flaring reduction and valorization projects in the Niger Delta.

Seplat Energy’s stock is already up +15% since the announcement broke out earlier today.

Details on OMLs 67, 68, 70, and 104 are available in the “Projects” section within your Hawilti+ research terminal.

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New joint-venture incorporated to unlock Simandou iron ore blocks development in Guinea

Last week, Rio Tinto announced the incorporation of the TransGuinean joint-venture (Compagnie du TransGuinéen, in French) that will develop and operate new critical rail and port infrastructure in Guinea. An International Partnership The company is a partnership between the Government of Guinea (15%), Winning Consortium Simandou (WCS, 42.5%), and Rio Tinto Simfer (42.5%). Its incorporation notably follows the signing of a Framework Agreement in March 2022 to facilitate investment decisions for the co-financing and co-development of the infrastructure required to develop the giant Simandou iron ore project. WCS is itself a consortium of Singaporean company Winning International Group (45%), Weiqiao Aluminium (part of the China Hongqiao Group, 35%) and United Mining Suppliers International (20%). On the other hand, the Simfer joint venture comprises Simfer S.A., the holder of Simandou South Blocks 3 & 4, which is owned by the Government of Guinea (15%) and Simfer Jersey Ltd (85%). In turn, Simfer Jersey Ltd is a joint venture between the Rio Tinto Group (53%) and Chalco Iron Ore Holdings (CIOH, 47%) – a Chinalco-led joint venture of leading Chinese state-owned companies. A multi-billion dollars investment programme The TransGuinean will co-develop a 650km rail corridor and ports infrastructure in the in the Forécariah prefecture to unlock reserves at the four Simandou iron ore blocks. WCS is holder of blocks 1-2 while Rio Tinto Simfer is holder of blocks 3-4. “Following the incorporation of the joint venture, the parties will now work on next steps including shareholding agreement, finalising cost estimates and funding, and securing all necessary approvals and other permits and agreements required to progress the co-development of infrastructures,” Rio Tinto said in a statement.