Exxon Mobil Corporation XOM, the largest oil producer in the United States, has secured approval from Nigeria to sell its onshore oil and gas assets to Seplat Energy Plc, a domestic energy company. This decision ends a more than two-year delay in the $1.28 billion deal, allowing it to move forward.

The Nigerian Upstream Petroleum Regulatory Commission granted ministerial consent for the sale, according to its chief executive officer, Gbenga Komolafe, during a conference in Abuja on Oct. 21. Initially announced in February 2022, the deal awaited ministerial consent, which president Bola Tinubu recently promised.

Details of XOM’s Onshore Asset Sale to Seplat

Under the terms of the deal, Seplat will take ownership of 40% of four oil mining leases and associated infrastructure, including the Qua Iboe export terminal. Almost 51% of the Bonny River natural gas liquids recovery plant, previously held by ExxonMobil’s Nigerian subsidiary, Mobil Producing Nigeria Unlimited, will also be transferred to Seplat. This transaction follows Nigeria’s broader trend of multinational oil companies exiting onshore operations amid rising challenges such as theft and sabotage.

XOM Joins the Shift to Offshore Operations

ExxonMobil’s divestiture aligns with a strategic shift by oil majors operating in Nigeria, Africa’s largest oil exporter. Companies are focusing on deepwater operations, which provide them with more lucrative and secure opportunities compared to their onshore counterparts. The approval follows similar transactions by other global energy players, including Eni and Equinor, who have also sold off their onshore assets in Nigeria.

With the approval of the deal, ExxonMobil can now shift focus to expanding its offshore operations in Nigeria, Africa’s largest crude producer. The company recently revealed plans to invest $10 billion in offshore assets in the coming years. Seplat, on the other hand, is set to nearly quadruple its production to more than 130,000 barrels per day with the acquisition.

Broader Impact on Nigeria’s Oil Sector

The Nigerian government is pushing for faster approvals of pending asset sales by oil majors, urging companies to take direct responsibility for oil spills and compensate affected communities. This policy aims to streamline divestments while addressing environmental and community concerns. The approval of ExxonMobil’s deal is a significant step in this effort and highlights the growing role of Seplat in Nigeria's oil and gas sector.

With the completion of this transaction, ExxonMobil is expected to further concentrate on its offshore investments, particularly in deepwater projects, to sustain its Nigerian presence while mitigating the operational risks associated with onshore fields.