The Nigerian Upstream Petroleum Regulatory Commission
(NUPRC) says the divestment deal between Oando and Nigerian Agip Oil Company
(NAOC) followed due process as provided by the Petroleum Industry Act (PIA).
In a statement by Olaide Shonola, the commission’s head of
public affairs unit, on Monday, NUPRC said the commission needed to address
concerns over the transparency of the recent divestments in the oil and gas
industry.
On August 22, Oando said it completed the acquisition of
Eni’s 100 percent shareholding in the NAOC for $783 million.
Reacting to the deal on August 25, Atiku Abubakar, former
vice-president, asked the federal government to explain why Oando Plc, “owned
by the president’s nephew,” received accelerated approval to buy the onshore
assets of Agip and Eni while other transactions — such as the Shell-Renaissance
and the ExxonMobil-Seplat deals — continue to suffer delays.
In February 2022, Seplat announced an agreement to acquire
ExxonMobil’s 40 percent stake in Mobil Producing Nigeria Unlimited (MPNU) —
with the expectation that the transaction would be closed in the second half of
the year.
Also, on January 16, Shell said it agreed to sell its
Nigerian onshore oil assets to Renaissance — a consortium of local companies
formed by ND Western, Aradel Energy, First Exploration & Production
(E&P), Waltersmith, and Petrolin — for over $1.3 billion.
Addressing Atiku’s claim, NUPRC said the divestments of NAOC
to Oando and Equinor to Chappal Energies were conducted in accordance with the
PIA 2021 and the commission’s standard consent approval process.
NUPRC emphasised that the approvals, including that of
Seplat, were granted after thorough evaluations and due diligence reviews.
“The Commission wishes the public to be aware that the
approvals given to the NAOC-Oando and Equinor–Chappal were in accordance with
the Petroleum Industry Act (PIA) 2021, defined regulatory framework, and
standard consent approval process set by the Commission under the PIA,” NUPRC
said.
“To be sure, the consent to Oando and Chappal Energies were
fulfilled according to the regulatory process.
“In respect of the NAOC Divestment, NAOC by a letter of May
16, 2023, notified the Commission of its intention to proceed with the
divestment of participating interests in some of its oil and gas assets.
“The Commission by a
letter dated May 21, 2023, requested NAOC to provide information on the
proposed assignee. NAOC by another letter dated July 24, 2023, notified the
Commission that it had completed the technical evaluation of the companies
shortlisted for the proposed transaction and submitted OANDO PNGCL and OANDO
Coöperatief as qualified companies for the consideration of the Commission.
“The Commission by a letter dated August 9, 2023, granted
approval to NAOC to proceed to the commercial stage of the transaction.
“Consequently, NAOC, vide a letter of November 7, 2023, made
a formal application requesting the consent of the Minister of Petroleum
Resources to the NAOC Divestment.
“In line with its processes, the Commission by a letter
dated December 14, 2023, requested the information contained in the
Commission’s due diligence checklist on the transaction and NAOC by a letter
dated January 10, 2024, provided the information requested via the Commission’s
letter dated December 14, 2023.”
Furthermore, NUPRC said NAOC obtained a waiver of
pre-emption and consent to the divestment from NNPC, their partner on the
blocks.
“To ensure due diligence, the Commission, working with
reputable external consultants identified significant pre-sale liabilities
inherent in the assets to be divested by NAOC and proactively devised measures
to ensure that the identified liabilities are adequately provided for,” the
regulator added.
‘EQUINOR-CHAPPAL FOLLOWED REGULATORY PROCESS’
Contrary to Atiku’s claim of an unduly delayed process for
other deals, NUPRC said the Equinor-Chappal divestment followed the same
regulatory process as the NAOC-Oando transaction.
However, NUPRC said on a comparative basis, “MPNU through a
letter dated February 24, 2022, notified the Commission of its intention to
assign 100% of its issued shares to Seplat Offshore Energy Limited. The
Commission did not consent to this assignment because MPNU failed to obtain a
waiver of pre-emption rights as well as the consent of NNPC, its partner on the
blocks to the divestment”.
“It is worth pointing out that NNPC’s right to pre-emption
and consent under the NNPCL/MPNU Joint Venture Joint Operating Agreement was
the subject of Suit No: FCT/HC/BW/173/2022 Nigerian National Petroleum Company
Limited versus Mobil Producing Nigeria Unlimited, Mobil Development Nigeria
Inc., Mobil Exploration Nigeria Inc. and Nigerian Upstream Petroleum Regulatory
Commission,” NUPRC said.
“In June 2024, NNPC
and MPNU resolved their dispute with NNPC, and MPNU, by letter dated 26 June
2024 informed the Commission of the resolution of the dispute.
“Upon resolution of this dispute, the commission
communicated its no-objection decision to the assignment via a letter dated
July 4, 2024 and requested MPNU to provide information and documentation
required under the commission’s due diligence checklist to enable the
Commission conduct its due diligence as required under the PIA.”
NUPRC said the divestment by MPNU to Seplat is also
currently undergoing the same consent approval process and is expected to be
completed within the 120-day timeline provided by the PIA.
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