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ExxonMobil Exits Nigeria’s Downstream Oil Sector

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Posted: Oct 20, 2016 at 1:22 pm   /   by   /   comments (0)

 

*Sells 60% Stake In Mobil Oil Nigeria To NIPCO Plc

 

Charles Okonji

 

ExxonMobil Oil Corporation, a United States multinational oil firm, has reached an agreement with NIPCO Plc, a Nigerian independent petroleum company, for the sale of its 60 percent share in its downstream Mobil Oil Nigeria (MON) affiliate.

The development becomes yet another story of divestment by multinational oil companies operating in Nigeria.

The Nigeria’s downstream sector had lost a couple of high profile foreign players in recent times with the earlier divestment of Shell, Eni’s Agip and Chevron’s Texaco.

With the eventual exit of Mobil, the only major foreign player in the industry would be the French Total.

Venkataraman Venkatapathy, Managing Director of NIPCO, disclosed that the acquisition was agreed with the execution of a sales and purchase agreement (SPA) with ExxonMobil

However, the share-sale agreement, according Oge Udeagha, Manager, Media and Communications of ExxonMobil, does not involve ExxonMobil’s upstream production operations in Nigeria or lubricant supply to Caterpillar dealer, Mantrac Nigeria.

“We have also reached accompanying agreements for the continued import, blending and distribution of Mobil-branded lubricants and marketing of Mobil-branded fuel. These agreements will ensure the continued presence of the Mobil brand in Nigeria and position the brand for future growth,” Udeaga said.

According to him, Mobil Oil Nigeria board, Ministry of Petroleum, Nigerian Stock Exchange and other relevant statutory agencies have all been notified of the transaction.

Venkatapathy on his part stated that with the signing of the SPA, both companies would start the transition period and initiate the process of obtaining regulatory approvals from the requisite federal agencies – Security and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE).

According to him, the transition period would also enable NIPCO to effectively manage a smooth and successful completion of the transaction, adding that the company considered this 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 will add a huge value to NIPCO.

“In furtherance of this value addition, NIPCO will 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,” he said.

Venkatapathy also expressed NIPCO’s profound gratitude and appreciation to ExxonMobil for selecting it as the preferred bidder for the acquisition of MON.

“We wish to give every assurance to ExxonMobil that having entrusted us with this invaluable asset (MON), we will ensure full brand compliance with ExxonMobil’s global standards as well as rigorously sustain and follow ExxonMobil’s code of conduct/ethos and operational excellence.

“NIPCO’s expansion trend reinforces its implicit confidence in Nigeria’s future. The Nigerian economy still provides a robust and premium return on investment and NIPCO Plc is privileged to have been given this opportunity by ExxonMobil on its home ground. To our shareholders and stakeholders, we say welcome to a new dawn. A new era that will usher in stability, prosperity, sustainability and growth,” he stressed.

Independent gathered that subject to regulatory approval, change-in-control is anticipated by mid-2017.

ExxonMobil has three affiliates operating in Nigeria: Mobil Producing Nigeria Unlimited (MPN) – Upstream; Esso Exploration and Production Nigeria Ltd. (EEPNL) – Upstream; and Mobil Oil Nigeria (MON) – Downstream.

MON is one of the six major petroleum products marketers in the country and is comprised of 250 company-owned and dealer-owned Mobil-branded state-of-the-art retail stations in all 36 states of the federation, a fuel terminal and a lubricants plant in Apapa, and interests in two aviation fuel joint ventures in Lagos. Its ultra-modern lube oil plant, with a capacity of 450,000 barrels per annum is regarded as one of the most sophisticated in Africa.

The history of Mobil Oil dated back to 1907 when Socony Vacuum Oil Company began marketing operations in Nigeria, through the sale of sunflower kerosene.

In 1978, the company became a publicly quoted company and assumed its current name and status.

NIPCO Plc, formerly IPMAN Petroleum Marketing Company Limited (IPMCL), was incorporated by members of the Independent Marketers Association of Nigeria (IPMAN) on January 8, 2001 as a private limited liability company to participate in the distribution of white petroleum products business across the nooks and crannies of Nigeria.