NIPCO TO PAY $301m FOR 60% IN MOBIL OIL NIGERIA.

Nipco Investments ltd has finally agreed with ExxonMobil to pay $301m (about N91805m) for 60% shareholding in Mobil Oil Nigeria PLC.

According to an update on the ExxonMobil planned divestment from Mobil Oil Nigeria (MON), signed by MON CEO Mr Adetunji Oyebanji, Nipco has formally contacted Securities and Exchange Commission (SEC Nigeria) for permission to go ahead with the acquisition.

Involved are 216,357,157 ordinary shares which at the Nigerian stock exchange closed at N253.89 per share today November 30, as sale of 4556 units took place.

Based on this current price, the  60% holding command  market value of about N180bn. By implication, Nipco could be paying up to 67% premium in Naira terms at official N305 to the dollar.

For ExxonMobil, the sale is good business all round. Firstly, the money involved should help close corporate finance deficit of $1381m in first nine months of 2016.

Secondly Africa still contributes far less than US, Europe and Asia to ExxonMobil downstream income not to talk of potential for less dollar dividend from Mobil oil Nigeria in view of Naira value decline.

After all with its profit margin sliding from 9.25% in 2015 first nine months to 4.45% this year, it makes sense to shed weights.

However, one weight ExxonMobil may not be in a hurry to shed is its upstream operations in Nigeria.

Indeed, late October, ExxonMobil excitedly announced a new find under its OPL 223 license that points to untapped between 500 m and one billion barrels  in the Owowo oilfield in Nigerian deep water.

The operator of the field is owned 27% by ExxonMobil and Chevron Nigeria Deepwater G Ltd 27% each with Total E&P Nigeria and Nexen Petroleum Deepwater Nigeria controlling 18% each.

Nigeria Petroleum Development Company ltd, a subsidiary of the NNPC, has 10% stake too.

The discovery was drilled by Esso Exploration and Production Nigeria Deepwater ltd, an affiliate of ExxonMobil.

According to ExxonMobil, its future exploitation depends on ongoing talks between the partners and the Nigerian government.

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