American oil major ExxonMobil has declared force majeure on oil lifting from several ports in Nigeria, citing reported industrial action by the company’s in‑house workers union. The company said this in a statement yesterday. Leadership reports that the move will be another setback for Nigeria, a member of the Organisation of Petroleum Exporting Countries (OPEC) that lost its status as Africa’s top oil producer last year when firms such as Shell Plc and TotalEnergies reduced investment amid extensive corruption and security concerns.
ExxonMobil has been trying to sell $1.2 billion in shallow‑water assets in challenging Nigeria, the company told Reuters in February, while retaining deep‑water assets farther from the coast. Spokesperson Michelle Gray said on Monday that the company is exploring ways to resolve the issues with its workers. “We will continue to take all reasonable actions necessary to resolve the impasse as soon as possible,” Gray added.
In 2022, President Muhammadu Buhari reversed his earlier authorization of Seplat Energy Plc’s $1.28 billion purchase of ExxonMobil assets and backed the energy regulator’s decision to reject the deal. Hours after Buhari approved Seplat’s acquisition of Exxon’s shallow‑water business on 8 August 2022, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), which also serves as oil minister, contradicted the decision. Chief executive officer Gbenga Komolafe said the previous rejection of the proposed transaction remained in place.
Exxon began oil operations in Nigeria in the 1950s and, alongside Shell, helped create the oil industry that has become the bedrock of the Nigerian economy. Production in the Niger Delta swamps has generated billions of dollars in revenue for the companies and the government, but it has also produced corruption, violence and criminality that international oil groups find increasingly difficult to manage. In response, ExxonMobil and Shell have announced plans over the past two years to end their onshore operations while continuing offshore projects. The planned divestments provide an opportunity for local producers such as Seplat to expand, though both companies have been criticised for leaving behind environmental, social and operational problems.
Shell’s planned divestment of its Nigeria assets is on hold pending the resolution of its appeal against a court order to pay $1.95 billion in damages after a 2019 oil spill. Seplat reached an agreement to buy Exxon’s shallow‑water assets in February last year, but the deal was thrown into doubt after the Nigerian National Petroleum Company Limited (NNPCL), the state oil company, secured a court order barring Exxon from selling the four licences. Exxon operates the permits in partnership with NNPCL, which argued it had a contractual right of pre‑emptive purchase.
Seplat, listed in both London and Lagos, had welcomed Buhari’s decision, describing the deal as “a transformational transaction” that would create “one of the largest independent energy companies” on both stock exchanges. The acquisition would have increased Seplat’s oil production by roughly 95,000 barrels a day, tripling its output. Buhari also said the deal would boost Nigeria’s ambitions to attract more foreign direct investment in the energy sector.
In the short term, Exxon and Seplat are expected to work together to boost production at the four fields, helping Africa’s largest oil producer meet its OPEC quota of 1.8 million barrels a day. Nigeria has struggled to meet this target because of pipeline vandalism and theft in the Niger Delta region.
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