A deal in oil assets to the effect of ExxonMobil Limited transferring its oil assets to Seplat Energy Limited, an indigenous Nigerian firm, is generating a clash of governmental authorities.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) Tuesday insisted on its refusal of assent to the ExxonMobil/Seplat Energy share acquisition deal despite the approval by President Muhammadu Buhari, who serves as the Minister of Petroleum.
The Chief Executive Officer of NUPRC, Engr. Gbenga Komolafe, on Tuesday said the commission was sticking to its position against the deal which, he said, bypassed the laid down regulatory procedure.
Media statement from Nigeria’s presidency on Monday announced that President Buhari had granted assent to the deal in which Seplat will acquire a 40 per cent stake of ExxonMobil oil assets around Akwa Ibom State.
The presidency cited the Petroleum Industry Act (PIA) 2021, as an incentive to drive Foreign Direct Investment and raise oil production from the assets.
However, in a statement released not long afterward, the NUPRC clarified that the Commission in line with the provisions of the PIA 2021 is the sole regulator in dealing with such matters in the Nigerian upstream sector.
“The president is the greatest supporter of the PIA which he signed, to his credit. The essence of the PIA is to ensure there are predictable regulations in place, like is found everywhere else. We are not joining issues with anyone, what we are saying is there is a law that needs to be followed like in every jurisdiction,” Komolafe said.
Seplat Energy Offshore Ltd is a Seplat Energy subsidiary seeking cash acquisition, since February 25, of the entire share capital of Mobil Producing Nigeria Unlimited for $1.28 billion plus up to $300 million contingent consideration.
The Nigerian National Petroleum Corporation, now NNPC Ltd, had been in a tussle with ExxonMobil and Seplat over the transaction since the parties initiated the transaction in February 2022.
NNPC Ltd had insisted that it has the first right of refusal, being in a joint operating agreement (JOA) with Mobil.
It was further learnt that the Akwa Ibom government had also scolded the international oil company for proceeding on the assets lay off without recourse to the state hosting them.
In July, NNPC Ltd was said to have won a court decision to block its quest to purchase the entire oil assets of Mobil Producing Nigeria Unlimited (MPNU).
The court injunction on July 6, stopped the parties from proceeding with the deal. But Seplat in a disclosure in July said the company or its subsidiary, Seplat Energy Offshore Limited was not party in the lawsuit filed at a Federal High Court in Abuja by NNPC Ltd. Seplat then insisted the share purchase agreement was still valid and had sought for ministerial and regulatory approval to close the deal.
A highly placed source who is familiar with the high-level tussle over the deal said there are “deep interests in view of the lucrative nature of the assets in contention”.
A Seplat source on revealed: “I can authoritatively tell you that the deal has been concluded because we got a letter to that effect yesterday (Monday).
“Recall that we have done the commercial and purchase agreement since February. What has been holding this deal is the Ministers’ consent, who in this case is the President of the Federal Republic of Nigeria.”