Nigeria’s upstream oil regulator rejects Buhari’s approval of Seplat’s acquisition of Mobil Nigeria

Nigeria’s upstream oil regulator contradicted a presidential statement announcing President Muhammadu Buhari’s approval of Seplat Energy’s acquisition of Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation. The Nigerian Petroleum Upstream Regulatory Commission (NUPRC) said on Monday that the matter was regulatory and that nothing had changed after previously notifying ExxonMobil that the transaction had been rejected. “The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) affirms that the status quo remains in place with respect to the ExxonMobil/Seplat Energy share acquisition,” said a statement from NUPRC Executive Director Gbenga Komolafe. “Responding to media inquiries about the latest developments on the transaction, NUPRC Executive Director Ing. Gbenga Komolafe clarified that the Commission, in accordance with the provisions of the Petroleum Industry Act 2021, is the sole regulator dealing with these matters in the Nigerian upstream sector. “So to speak, the issue at stake is purely a regulatory matter and the Commission had previously communicated the decline of ministerial approval to ExxonMobil in this regard. As such, the Commission further asserts that the status quo remains.” The statement, effectively repudiating the presidential statement, came a few hours after presidential spokesman Femi Adesina said in a statement that Buhari had approved the sale to Seplat, an indigenous oil company. Mr. Adesina said that Mr. Buhari approved the transfer in his capacity as Minister of Petroleum Resources and that the approval was in line with the country’s drive for Foreign Direct Investment in the energy sector and considering the “broad benefits of the transaction for the Nigerian energy sector and the largest economy”. Exxon Mobil entered into a historic Sale and Purchase Agreement with Seplat Energy to acquire the entire share capital of Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation, Mobil Development Nigeria Inc and Mobil Exploration Nigeria Inc. earlier this year. The transaction suffered a setback after the state-owned Nigerian National Petroleum Corporation Limited asserted a right of first refusal over the deal. As a joint venture partner, NNPC argued that it retained the right to buy oil blocks sold by ExxonMobil before any competitor or private company. Seplat Energy said in July that NNPC Ltd. won a court decision to block its bid to buy all the oil assets of Mobil Producing Nigeria Unlimited (UNMP), a local unit of oil company ExxonMobil. The July 6 court decision was temporary and prohibited MPNU and the defendants from consummating any disposal of assets in MPNU, not excluding the share purchase agreement reached with Seplat in February. NNPC had asked the court, Federal Capital Territory State High Court, to declare that there was a conflict between the state oil company and MPNU over the “interpretation of preemptive rights under their Joint Operating Agreement” (” JOA”) and order NNPC and UNMP to arbitration as required by the JOA.” Seplat Energy said that neither it nor Seplat Energy Offshore Limited was a party to the lawsuit and insisted that the share purchase agreement was still valid. The asset purchase would allow Seplat Energy to increase production by 95,000 barrels of oil per day from assets in a joint venture that ExxonMobil operates with NNPC. CONTROVERSIAL DECISIONS PREMIUM TIMES has learned that Mr. Buhari had last week rejected Seplat’s offer in favor of NNPC, only for a contradictory statement to be published on Monday. Officials said the opposing decisions suggest the president may not be in full control of critical state issues and that powerful interests sometimes work through advisers to get favorable decisions, even controversial ones. They argued why the president would hand over the oil asset to a private company when the government has just commercialized the NNPC, turning the former regulator into an operator and competitor in the industry. Mr. Adesina’s statement read: “The President, in his commitment to boosting investment in light of the Petroleum Industry Law, gave his consent to the Share Sale Agreement, as requested by the parties to the transaction, and directed that the approval be transmitted to all parties. involved. “Exxon Mobil/Seplat is expected to carry out the operation of all oil drilling licenses in the shallow water assets related to production optimization to support Nigeria’s OPEC quota in the near term, as well such as ensuring accelerated development and monetization of gas resources at assets. for the Nigerian economy. ExxonMobil’s decision to pull out of Africa’s largest oil producer reflects a growing trend among international oil companies to suspend their holdings in offshore operations in the country and shift their investments elsewhere. Oil drillers find operations that are close to host communities of increasing concern and feel that holding on to offshore fields is the way to go. In April, TotalEnergies SE announced plans to sell its 10 percent minority stake in a joint venture with a company that owns twenty onshore and shallow water licenses in Nigeria. Shell, which owns the permits, has received offers from four indigenous companies, including Seplat, for a 30 percent stake in the company. Read More Related News Here Let here it in the comment below if you do have an opinion on this; Nigeria’s upstream oil regulator rejects Buhari’s approval of Seplat’s acquisition of Mobil Nigeria