LAGOS, June 14 (Reuters) - Seplat Energy is

pursuing a swift conclusion to its $1.28 billion acquisition of

ExxonMobil's ( XOM ) Nigerian shallow water oil assets, it said

on Friday after being notified that NNPC had halted a legal

challenge to the deal.

State oil company NNPC had challenged Exxon's sale of the

assets to Seplat, saying it had first right of refusal. The deal

was further held up by regulatory issues.

"Seplat Energy commends the open cooperation and progress

achieved by all stakeholders, and will diligently engage (with)

all key stakeholders, including the government, in progressing

towards a swift completion of the acquisition," a Seplat

statement said.

An NNPC spokesperson was unable to provide immediate

comment.

Analysts have said that the Exxon-Seplat deal would inject

much-needed capital into Nigeria's oil industry, potentially

leading to improved output. It would also signal to investors

that similar deals, such as Shell's asset sale to Renaissance in

January, are likely to gain regulatory approval.

Nigeria, Africa's biggest oil producer, relies on crude oil

for more than 90% of its foreign exchange and half its budget.

However, output has declined in recent years owing to

underinvestment and theft.

Oil majors operating in Nigeria, including Shell

and TotalEnergies, have been exiting their onshore

shallow water operations to focus on deepwater drilling

operations.