NNPC Set to Lift JV Stake as Seplat Keeps Operatorship

NNPC Limited is set to increase its ownership in one of Nigeria's strategic oil joint ventures (JV) after Seplat Energy signed a legally binding agreement to sell a 10 percent working interest in the NNPCL and Seplat Energy Producing Nigeria Unlimited (SEPNU) joint venture for about $281.6 million.

The deal, disclosed in a filing to the Nigerian Exchange on Thursday, is important because it gives NNPC a larger 70 percent working interest in the venture while allowing Seplat to remain operator, a structure that keeps ongoing field development under the same management as Nigeria pursues higher oil production.

Seplat first announced the planned transaction in September 2025. The latest filing confirms that both parties have now signed a binding heads of agreement, with completion planned for the second half of 2026 after regulatory approvals and other customary conditions.

The arrangement keeps operational continuity while changing the ownership structure of one of Nigeria's major producing assets.

Higher NNPC ownership with operations unchanged

Seplat maintained that its subsidiaries, Seplat Energy Offshore Limited (SEOL) and SEPNU, signed the agreement with NNPC Limited for the sale of a 10 percent working interest in the joint venture assets for a headline transaction value of about $281.6 million.

The company said the commercial terms represent about 25 percent of the gross transaction consideration paid and any contingent consideration payable by SEOL for its acquisition of SEPNU.

Once the transaction is completed, NNPC's working interest in the joint venture will increase from 60 percent to 70 percent. SEPNU will retain a 30 percent working interest and will continue to operate the assets. Seplat will also continue to own 100 percent of the share capital of SEPNU.

The structure is significant for NNPC because it increases the national oil company's ownership in a licence area that Seplat itself says is strategically important to Nigeria, without changing the operator responsible for day to day field activities.

That means NNPC stands to hold a larger economic interest while ongoing development programmes continue under the existing operating arrangement.

The transaction has an effective date of April 1, 2026. However, Seplat said completion is planned for the second half of 2026 and is subject to regulatory approvals and other customary conditions.

Seplat also confirmed that the sale will not alter the NNPC Ltd.and SEPNU joint venture's production target for 2026. The company said SEPNU currently represents about 80,000 barrels of oil equivalent per day at the midpoint of its 2026 group production guidance of 135,000 to 155,000 barrels of oil equivalent per day.

That contribution would reduce to about 65,000 barrels of oil equivalent per day, with production guidance to be updated after completion, assuming the April 1, 2026 effective date.

The company said proceeds from the transaction will be shared between debt reduction and shareholder returns under its capital allocation framework.

About half of the proceeds will go towards reducing debt, while the remaining half will be used to improve shareholder returns.

Subject to completion, about $140 million, equivalent to 23.3 US cents per share, will be paid to shareholders as a cash dividend in addition to the company's underlying business performance dividend.

Seplat also said up to $300 million of gross debt is targeted for repayment. It noted that $200 million under its Advanced Payment Facility was repaid in the second quarter of 2026, while the remaining $100 million will be repaid after the transaction is completed.

Speaking on the agreement, Seplat Energy Chief Executive Officer, Roger Brown, said: "Our relations with our partner NNPCL are strong and we are fully aligned on the agreed work programmes."

He also said: "Together, we are focused on delivering significant value from the JV which has responded very well to increased development activity since we became operator and has clear potential to deliver strong production growth well into the next decade."

It was noted that Seplat's financial position gives it room to use the proceeds from the disposal to increase shareholder returns while reducing its debt burden.