(Bloomberg) -- Nigerian President Muhammadu Buhari reversed his earlier authorization of Seplat Energy Plc’s $1.28-billion purchase of Exxon Mobil Corp. assets and backed the energy regulator’s decision to reject the deal, according to a spokesman.
Hours after Buhari’s office approved Seplat’s acquisition of Exxon’s shallow-water business on Aug. 8, the Nigerian Upstream Petroleum Regulatory Commission contradicted the head of state, who also serves as oil minister. The agency’s chief executive officer, Gbenga Komolafe, said in a statement that its previous rejection of the proposed transaction remained in place.
Buhari now agrees with the NUPRC’s position, Garba Shehu, a spokesman for the presidency, said on Aug. 10 by text message.
Seplat “has received no official notification” that Buhari’s assent has been withdrawn, the company said in a statement Thursday. “We will continue to work with all parties to achieve a successful outcome to the proposed acquisition,” it said. Exxon declined to comment.
Read: Oil Regulator Overrules Nigerian President on Exxon Deal
The deal “now hangs by the slimmest thread,” Lagos-based investment bank Chapel Hill Denham wrote in a note Thursday. However, “we remain optimistic since the blocking of the deal is counter-intuitive to the regulator’s dream of attracting investment” into the oil and gas sector, it said.
The uncertainty comes six months after Seplat announced the deal, which would give the company additional daily production of about 95,000 barrels of oil equivalent from four permits Exxon operates in a joint venture with the state-owned Nigeria National Petroleum Co. That would almost triple the London- and Lagos-listed firm’s output.
The NNPC has been trying to block the sale and take over the permits itself. A court in the capital, Abuja, granted the state company an interim injunction on July 6 barring Exxon from selling the subsidiary that holds the assets, according to a statement published last month by Seplat.
(Updated with Seplat, Exxon and analyst comments in fourth and fifth paragraphs)
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