Nigeria is poised to increase its daily crude oil output by 480,000 barrels following a significant development between the Nigerian National Petroleum Company Limited (NNPCL) and ExxonMobil.
The agreement marks a crucial step towards resolving the dispute surrounding the sale of ExxonMobil’s asset to Seplat Energy Offshore Limited.
The settlement agreement, confirmed by NNPCL on Thursday, comes on the heels of President Bola Tinubu’s intervention in the impasse between the two parties, which had stalled the sale of the assets to Seplat.
Minister of State for Petroleum, Heineken Lokpobiri, lamented the substantial losses incurred by Nigeria due to the unresolved divestment, estimated at $30 billion over the past two and a half years.
He highlighted concerns that the nation was losing approximately 480,000 barrels of crude oil per day as a result of the crisis.
The saga began in 2022 when ExxonMobil and Seplat Energy announced a $1.6 billion sales agreement, which would see Seplat acquire ExxonMobil’s complete shares in NNPCL. However, the deal hit a roadblock when NNPCL exercised its right of pre-emption, citing its legal right to be considered first for any asset sale.
After years of litigation, there seems to be a breakthrough in the dispute, with the signing of the settlement agreement.
The resolution is expected to not only pave the way for the sale to Seplat but also add approximately 480,000 barrels to Nigeria’s daily oil production.
The Minister emphasized the significant economic impact of the unresolved crisis, noting that the nation had lost billions of dollars due to decreased oil output. He highlighted the potential benefits of resolving the dispute, including a boost to the economy and stabilization of the exchange rate.
With the signing of the settlement agreement, Nigeria is poised to capitalize on the potential increase in oil production, providing a much-needed boost to the nation’s economy.