Financial Energy Review
……as long drawn Boardroom Battle Extended to Asset Bid……
The recent expression of interest by Chappal Petroleum own by Austin Avuru a former top Executive of Seplat to buy over Exxonmobil Nigeria Assets after Seplat had pull out of the deal is not unconnected to the long drawn boardroom fight that led to Avuru’s exit from Seplat.
Seplat dropped it’s initial plans to buy the ExxonMobil Assets because Warburg Pincus-backed Trident Energy which was Seplat offshore partner that was expected to bring a substantial part of the estimated $1.5 billion ExxonMobil Nigeria assets backed down in providing the needed fund.
Industry source said that for Seplat foreign partners to have stand down it’s backing for Seplat in the deal must have been orchestrated by the Suden interest of Avuru’s Chappal Petroleum with a foreign partner that has a deep pocket of market capitalization of about US$908 billion.
According to the source Exxonmobil may not be exonerated from any fall out from the deal. The oil major is being accused of having a pre- knowledge of which way the deal will swing to. It is said that top executives of the company may have decided which company will win the deal. “Exxonmobil asking other indigenous Nigerian Companies to compete for the deal is of no use because they have made up their mind which company will buy the assets. Therefore any company expressing interest for the asset will only end up losing money” the source said
With the backing of Cairn Energy, Chappal Petroleum is also said to be chasing several other Nigerian assets, which some of the International Oil Companies (IOCs) in Nigeria want to divest especially on onshore and swamp areas.
The participation of Avuru’s company in bidding for the assets, it was gathered, was the major reason Avuru was asked to step down from the Board of Seplat Energy Plc, when Seplat discovered his (Avuru’s) company was a key contender for the assets. Avuru was a non-executive director on the board of Seplat Energy Plc.
It was also reported that other firms are vying for the assets but top Executive of ND Western limited one of the top indigenous player said they are not interested in bidding for for the assets. But top on the list and ExxonMobil’s preferred bidders are Seplat Energy Plc and Chappal Petroleum Development Company.
ExxonMobil is said to be pushing for more bidders adding that offer is still open but the oil giant will close transaction between now and end of February as the senior partner in the assets ownership, the Nigerian National Petroleum Company Limited (NNPC) had earlier given approval for sale to Seplat but that was before the pull out of Trident Energy from the deal.
Industry players are still insisting that the appetite for financing acquisition in the oil industry is for now very low.
