(Bloomberg) -- Nigeria is set to approve Exxon Mobil Corp.’s sale of its oil and gas assets to domestic energy supplier Seplat Energy Plc, President Bola Tinubu said.
The “divestment will receive ministerial approval in a matter of days,” Tinubu said in a speech on Tuesday marking Independence Day in the West African nation. The move will “increase oil and gas production, positively impacting our economy,” he said.
Africa’s largest oil producer has consistently failed to meet its OPEC target because of years of underinvestment in its oil industry, a key driver of economic growth and government revenue. The country produced 1.48 million barrels of crude per day in August, compared with an OPEC quota of 1.5 million barrels, according to data compiled by Bloomberg.
Last week, Nigerian Vice President Kashim Shettima said that Exxon is considering investing as much as $10 billion in the country’s offshore oil industry in coming years. Seplat has previously said that acquiring Exxon’s assets would almost quadruple the company’s oil output to more than 130,000 barrels per day.
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Approving the sale of assets to Seplat will end a more than two-year hiatus that stalled the conclusion of the $1.3 billion transaction. Nigeria’s state oil company in June withdrew a legal challenge blocking that had blocked the transaction.
“Our administration is committed to free enterprise, free entry, and free exit in investments, while maintaining the sanctity and efficacy of our regulatory processes,” Tinubu said.
The president said that economic reforms implemented by the government since he took office in May 2023 have attracted more than $30 billion in foreign direct investment to the country. While the policy overhaul has been welcome by foreign investors, it’s spawned a cost-of-living crisis in Africa’s most-populous nation that triggered deadly protests.
Other Highlights From Tinubu’s Speech:
- Since June 2023, the more disciplined approach adopted by the central bank to monetary policy management has ensured stability and predictability in the foreign exchange market.
- Over the past 16 months, Nigeria’s debt-service ratio has been reduced to 68% from 97%, and foreign reserves have grown to $37 billion from $33 billion.
- Progress has been made in eliminating banditry, kidnapping for ransom, and the scourge of all forms of violent extremism in northern Nigeria.
- Once passed into law, the Economic Stabilisation Bills approved by the Federal Executive Council will improve Nigeria’s business environment, stimulate investment and reduce the tax burden.
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