Mar 24, 2023
Nigeria’s Seplat Sues Ex-Chairman Over Exxon Blocks Sale
(Bloomberg) -- Nigeria-focused oil producer Seplat Energy Plc is suing the company’s former chairman over his involvement in the firm’s efforts to finalize a deal to acquire assets from ExxonMobil Corp.
Seplat filed a lawsuit against Ambrosie Bryant Orjiako in Nigeria’s capital, Abuja, on March 21. It accused him of making an unauthorized proposal on the company’s behalf to the country’s President Muhammadu Buhari, with the aim of unblocking the stalled transaction with Exxon.
Orjiako and spokesmen for Buhari didn’t respond to requests for comment. Exxon declined to comment on the matter.
In February 2022, Seplat agreed to buy Exxon’s shallow-water oil assets in Africa’s largest crude producer for almost $1.3 billion, a deal that would almost triple the company’s output. State-owned Nigerian National Petroleum Co., which has a 60% stake in the fields, intervened and is attempting to take over the licenses itself.
Buhari approved the Seplat-Exxon transaction in August before swiftly reversing the decision and siding with a regulatory agency’s rejection of the sale. The following month, Seplat signed a contract with Orjiako, who had only recently stepped down as the firm’s chairman, under which he would help the company in negotiations with Buhari, Minister of State for Petroleum Resources Timipre Sylva and the NNPC.
Seplat, which is listed in Nigeria and London, alleged that Orjiako committed “a grave act of deceit and false representation” by writing to Buhari on Seplat letterhead proposing a solution to the impasse without the company’s authorization, according to the lawsuit. The company has also canceled the consultancy agreement with one of Orjiako’s companies, saying on Thursday that he breached the terms of their arrangement.
In the letter to Buhari, seen by Bloomberg, Orjiako offered to assign an additional 10% in the four oil blocks to the NNPC, at commercial terms to be agreed later, leaving Seplat with a 30% operating interest. The rights he offered to transfer to the state energy company without the consent of Seplat’s board are worth more than $300 million, according to the lawsuit. Seplat is seeking damages of 5 billion naira ($10.9 million).
The NNPC didn’t respond to a request for comment.
Orjiako co-founded Seplat in 2009. The firm has become one of the largest independent producers of crude and natural gas in Nigeria, pumping about 50,000 barrels of oil equivalent each day from a portfolio of eight onshore blocks.
See also: Nigeria’s Seplat Spent $450 Million With Firms Tied to Founders
Earlier this month, a Nigerian court forced Seplat Chief Executive Officer Roger Brown to step down temporarily over allegations of unfair treatment of local staff. The company said it would challenge the order, describing the accusations as “a spurious and vindictive reaction to the Board’s enforcement of corporate governance standards.”
Seplat paid the Isle of Man-registered firm through which Orjiako provides consulting services $1.46 million last year. Under the terminated agreement, his company was entitled to a monthly retainer of $333,000 and a success fee of no more than $4.8 million upon obtaining required approvals for the Exxon transaction. Orjiako and his family continue to own about 6% of Seplat’s shares.
Buhari is due to leave office at the end of May and be succeeded by Bola Tinubu, the ruling party’s presidential candidate who won an election held last month.
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