ExxonMobil exits Nigeria’s downstream sector, sells 60 percent stake

October 20, 2016 | Asset Acquisitions & Divestitures, Downstream, Nigeria

Lagos, Nigeria | – American multinational oil and gas giant, ExxonMobil has divested its downstream operations in Nigeria, following the acquisition of 60 percent equity at Mobil Oil Nigeria (MON) Plc, by Nipco Plc, an indigenous downstream oil and gas company.

Addressing the media on the deal, the Managing Director of NIPCO Plc, Mr. Venkataraman Venkatapathy, explained that NIPCO would continue to maintain the Mobil brand on its retail outlets as well as continue to blend and sell the Mobil brand of lubricants under Branding Licence(s) from ExxonMobil.

The NIPCO boss disclosed that the acquisition was agreed with the execution of a Sales and Purchase Agreement with ExxonMobil, adding that the signing of the deal signals the start of a transition period which will span about eight months.

Mr. Venkataraman Venkatapathy hinted that the process of obtaining regulatory approvals from the requisite agencies-Securities and Exchange Commission (SEC) and Nigeria Stock Exchange (NSE) has begun.

According to him, the transition period will equally enable NIPCO Plc to effectively manage a smooth and successful completion of the transaction, adding that NIPCO considers the acquisition an important synergy.

‘‘It is part of our strategic move to support NIPCO’s continuous growth and expansion of its Nigerian retail footprint. We are confident of adding tremendous value to MON and likewise MON adding a huge value to NIPCO,’’ he said.

He, however, added that MON will continue to run as a separate, distinct and independent company from NIPCO Plc with each of its own CEO reporting to its Board of Directors. On the value of the 60 percent equity, Venkatapathy said the confidentiality clause in the agreement forbids him from making such disclosure, just as he added that the funds secured for the 60 per cent stake were from equities and loans.

On workforce management, NIPCO said it would respect the terms of all collective agreements with employees and the unions that represent them (PENGASSAN and NUPENG),insisting that all employees are assured of job safety as there are no plan for staff redundancy.

On his part, the Executive Director, Corporate Services, Mr. Abdulkadir Aminu, said the divestment of Exxonmobil from downstream operations was not borne out of bankruptcy, but on technical reasons.

He maintained that ExxonMobil’s divestment would assist indigenous operators the opportunity to grow their business.