• As Seplat hits Orjiako with N5 bn litigation

Sopuruchi Onwuka

Plans by Seplat Energy Plc and ExxonMobil to press on with closure of the stalled asset divestment before President Muhammadu Buhari’s administration leaves office may be difficult to deliver after deal broker, Dr ABC Orjiakor’S Amaze Limited, has its contracts cancelled and also hit with some N5.0 billion suit for infractions against its clients.

Seplat’s declaration of dispute with its government relations consultants on the divestment deal now puts a new block on the road to imminent closure promised by both ExxonMobil and Seplat earlier in the month.

It is not clear how quickly the indigenous indepdendent would quickly pull together and forge ahead with the acquisition under its prevailing boardroom feud and management crisis which had swept away Dr Orjiakor from the Chairman’s seat and pushed Mr Roger Brown from Managing Ditectors’s seat.

Both Seplat and ExxonMobil had confidently informed their shareholders in separate statements that the deal would soon be concluded to deliver significant cash recovery for the American oil giant while consolidating the business viability profile of the London listed independent firm.

ExxonMobil had early in the month expressed high hopes of progressing with its plans to claw back princely $1.2 billion from its brownfield petroleum assets trapped in joint venture operations with the Nigeria National Oil Company (NNPC) Limited in the shallow waters of Niger Delta.

A top executive of ExxonMobil Corporation had told agency sources in Houston, United States, that the company was working to get governments’ approval to allow divestment of its stake in the oil assets to Seplat Petroleum.

Global Upstream President of the company, Liam Mallon, said whereas ExxonMobil would keep its deep-water assets in Nigeria it is determined sell its $1.2 billion shallow water stakes in the country.

In a separate move, Seplat Energy Plc also said it was working with the government to get the deal approved before a new president is sworn in.

The company which has been in corporate board crises in the past two years is currently working hard to meet multiple obligations to stakeholders including lenders and shareholders. Seplat vows that it is solidly committed to concluding the asset acquisition as crucial part of its inorganic growth strategy.

Managing Director, Mr Roger Brown, had told The Oracle today that the company had spied the opportunity for the deal and made unsolicited offer to take off the portfolio from ExxonMobil, explaining that there were no contentions between the two willing parties in the deal.

The promises significantly relied on the confidence that consultancy contract awarded Dr Orjiakor, the erstwhile Chairman of Seplat, and his Amaze limited, would secure the highly needed external stakeholders’ support to push the deal through.

But the consultants, according to Seplat, instead overreached themselves by assuming the identity and deploying official business instruments of their clients in a manner that exposed them to perceived risks.

Chairman of Seplat, Mr Basil Omiyi, informed shareholders pursuant to Rule 17.10 of the Rulebook of the Nigerian Exchange Limited, 2015 that the company has commenced legal action against Dr Orjiako and Amaze Limited at the Federal High Court in Abuja, to seek appropriate legal remedies for “breaches of a material nature.”

Mr. Omiyi who issued the statement on behalf of the entire Board of Seplat Energy PLC said the legal action against Dr Orjiako and Amaze Limited at the Federal High Court in Abuja, was also “to protect the Company and its Shareholders, Directors, and Officers from potential and increasing liability arising from the conduct of the Consultants, Dr. Orjiako and Amaze Limited.”

The dispute actually started with terminating the consultancy services of Dr Orjiakor and his affiliate company.

In a letter of March 23 to the Nigerian Stock Exchange and London Stock Exchange notifying stakeholders of “Termination of Consultancy Agreement” Seplat declared that severance of Dr Orjiakor and Amaze limited from the company’s consultancy services took immediate effect.

“Under the Consultancy Agreement, Dr. Orjiako was obliged to provide defined assistance with certain external stakeholder engagements following his retirement from the Board after the 2022 Annual General Meeting in May 2022.       

“The termination follows the suspension of the Consultancy Agreement on 13 February 2023, as unanimously approved by the Board of Directors, following repeated warnings about breaches of a material nature, such as unilaterally making significant commitments on Seplat’s letterhead without prior Board authority or knowledge.

“This course of action was necessary to protect the Company and its Shareholders, Directors, and Officers from potential and increasing liability arising from the conduct of the Consultants, Dr. Orjiako and Amaze Limited.

“The Company has commenced legal action against Dr Orjiako and Amaze Limited at the Federal High Court in Abuja, to seek appropriate legal remedies,” Mr Omiyi stated in the letter.

The Oracle Today gathered that part of the goals of the consultancy services is to secure for Seplat regulatory and ministerial approval for the acquisition of ExxonMobil’s 40 stake in operated joint venture assets with the Nigerian National Petroleum Company (NNPC) Limited.

Seplat is currently a reliable partner of NNPC in operated joint ventures that similarly materialized from stake divestments by Shell, Total, Eni and Chevron in a number of onshore assets. And acquisition of the ExxonMobil assets would be a consolidation of Seplat’s rising profile as a credible successor of the multinational oil firms currently vacating brownfield and marginal assets in the mature conventional Niger Delta basin.

There have been other indigenous and international independent companies like Seplat emerging from the divestments: Elcrest, Eroton, First Hydrocarbon, et cetera. However, Seplat remains ahead with value proposition for sellers, buyers and government stakeholders.

The ExxonMobil acquisition appears also to have come with a number of intrigues for Seplat. And since the deal became open and more interests including the NNPC focused on it, progressing with it has become increasingly difficult for ExxonMobil. The result is that stalemate in field operations and maintenance activities has led to perceived production decline.

Greatest milestone in the deal was the brief ministerial and presidential approval which was promptly overturned on NNPC’s objection which was supported with regulator’s reprobation. And with the disengagement of Dr Orjiakor’s Amaze Limited and slamming of N5.0 billion litigation on them, it appears that Seplat would be starting afresh with a different strategy in driving the deal forward.