BAMIDELE OGUNWUSI
After about two years of due diligence, Nigeria’s biggest deal has finally been concluded as Seplat Energy, one of leading Nigerian energy company listed on both the Nigerian Exchange Limited and the London Stock Exchange, has completed the acquisition of $800 million Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil.
The acquisition, seen as a big end of the year gift to shareholders of Seplat Energy, is the biggest deal in the oil and gas sector of the Nigerian economy.
The transaction is transformative for Seplat Energy, more than doubling production and positioning the company to drive growth and profitability, whilst contributing significantly to Nigeria’s future prosperity.
The completion of this acquisition has created Nigeria’s leading independent energy company, with the enlarged company having equity in 11 blocks (onshore and shallow water Nigeria), 48 producing oil and gas fields, five gas processing facilities, and three export terminals.
The acquisition of the entire issued share capital of MPNU adds the following assets to the Seplat Group: 40 per cent operated interest in OML 67, 68, 70 and 104; 40 per cent operated interest in the Qua lboe export terminal and the Yoho FSO; 51 per cent operated interest in the Bonny River Terminal (‘BRT) NGL recovery plant: 9.6 per cent participating interest in the Aneman-Kpono field; and approximately 1,000 staff and 500 contractors will transition to the Seplat Group.
Senator Udoma Udo Udoma, Chairman of Seplat Energy, said: “Seplat Energy sincerely thanks President Bola Ahmed Tinubu, for supporting this transaction, and appreciates the support and diligence of the various ministries and regulators for all the work to reach a successful conclusion.
“We are delighted to welcome the MPNU employees to Seplat Energy. We are excited to begin our journey in a new region of the country, and we look forward to replicating the positive impacts we have achieved within our communities in our current areas of operations.
“Seplat’s mission is to deliver value to all our stakeholders, and we treasure the good relationships we have developed with the Government, regulators, communities and our staff.”
Roger Brown, Chief Executive Officer of Seplat Energy, said: “Today we have achieved a major milestone in the history of Seplat Energy and I extend my thanks to the entire Seplat team for their hard work and perseverance to complete this transaction.
“MPNU’s employees and contractors have a strong reputation for safety and operational excellence, and I welcome them to the Seplat Energy Group.
“We have acquired a company with one of the best portfolios of assets and related infrastructure in a world class basin, providing enormous potential for the Seplat Group. Our commitment is to invest to increase oil and gas production while reducing costs and emissions, maximising value for all our stakeholders.
“MPNU is a perfect fit with our strategy to build a sustainable business that can deliver affordable, accessible and reliable energy for Nigeria alongside attractive returns to our shareholders”.
Explaining the process of integration, Brown said Mobil is excellent and has been well known over the years to have an excellent, well trained, safe operation staff,
“So it will run as a separate subsidiary of Seplat. It will join our excos and will be linked into Seplat. We will do that certainly for a lot of 2025 to make sure that we stabilize the workforce and then take our time to be very clear of what we are going to do at some point in the future,
There will be more of an alignment and we are very excited because there is a lot of commonality around here. I think the cultures are good and similar. I think the outlook of the staff is similar, and I think the skill sets are interchangeable between the two, but not initially. So, you run it separately, Seplat itself today has its operations around assets. So we have our western assets, we have the eastern assets etc. So it is not similar from what we do today, but in terms of a real long term integration, we are going to take our time to do that
Mr Samson Ezugworie, Chief Operating Officer, said Seplat is excited to have Mobil on board.
He said, “In terms of the assets and these dimensions, the opportunities and the value it brings to the group, I will say this acquisition is a world class asset. If you look back in history, the asset has produced nearly 7 billion barrels and the view as of today is that we still have in the ground as much value and as much volume as we have produced. So that’s on one side. On the second side, we have currently over 600 wells drilled across the assets in four blocks, and currently only about 200 of those wells are producing.
“So in terms of production growth, there is a lot of value in those wells, called the idle wells, and our primary focus in the short term is to rejuvenate these wells through rigorous interventions. And that should offer expenses that will be our first focus, and that will also offer us opportunity to all opportunities. One is to ramble protection immediately, and secondly it also gives us some solution time to mature reconstructing, because we need to jack up rigs to go into these fields and begin to drill.
“We are a world class company and the number one independent company in the country that is willing to bring the needed investments forward to develop the assets. And so if you have that tripod fixed, then what you do is to put a plan in place for near term, mid term and longer term opportunities. For the near term, we have clear line of sight on activities that were already included in our company plan, and those are the ones that will progress.
“They’re all associated with moving forward with the idle wells that are currently being shortened. Approximately 400 idle wells are shortened as of today. You take a conservative number, 20, 30% of that. You’re talking about hundreds, hundreds of wells that can easily be put into a campaign platform based or large campaign to bring in volumes in the near term.
“And then you start with the technical folks going through opportunity and maturation to develop those ones that you would then put on a rig program, while you start the contract, until you finish the contracting, you’re in a position where you can now bring the rigs in and then do some form of infiltrating. And on the back end, you have the longer term activities where you put a plan together, an integrated oil and gas development plan that would help capture the gas resources that I believe circling has done real great stuff on in the past. That’s the sequence. It’s the near term stuff associated with idle wells, midterm associated with infield drilling, because you’ve got contracting items to progress, and then the longer term would be, you put in your development plans and you put together an integrated volume”.
In his contribution, Director of Production, Mr. Ikay Ogunmwonyi, said the export terminal under the MPNU was designed for 600,000 barrels per day of oil but was underutilised.
In addition, he said the asset holds over 600 wells but that 70 per cent of those wells were not producing, leading to the 30 per cent stagnation.
He explained: “The terminal itself is designed for 600,000 barrels. That’s what that facility is designed for. And we are nowhere near that today. We have over 600 wells on that asset and 70 per cent of those wells are not producing.
“There’s a lot of work going on right now. And they’re not producing for various reasons. There’s a lot of work going on right now for us to determine exactly how much production we will get out of those wells. Because you have to do some work. You have to get vessels. You have to get boats.
“You have to get all of that put together. I’m trying to leave you with the fact that there’s so much knowledge capacity that we have to play with. So, I think it’s the beginning of a new day.
“It’s an exciting time not just for us in Seplat, but it’s also an exciting time for the country. So I’ll ask that you please watch that space.”
Outlook
MPNU adds substantial reserves and production to Seplat Energy; 409 MMboe 2P reserves and 670 MMboe 2P + 2C reserves and resources as at 30 June 2024 and 6M 2024 average daily production of 71.4 kboepd.
As operator, Seplat’s immediate tasks are to ensure smooth transition of MPNU staff into Seplat, and on the operations, to swiftly target numerous opportunities that exist to organically grow production and further enhance the value of the assets for all stakeholders.
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