THERE are indications that the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, the regulator of Nigeria’s upstream oil sector, is not responsible for the alleged delay in granting consent to the sale of $1.3 billion of ExxonMobil’s 40 percent stake in Mobil Producing Nigeria Unlimited, MPNU’s assets, to Seplat Energy Plc.
The intention of ExxonMobil to sell its oil assets to Seplat Energy Plc, a leading Nigeria’s independent energy company, started over two years ago but has not yet been concluded.
The Commission Chief Executive, NUPRC, Gbenga Komolafe, could not be reached for comments.
But speaking at the Africa Oil Week, AOW, in Cape Town, South Africa, last October, Komolafe, who had expected the deal to be concluded much earlier, said: “We are very optimistic that parties to the transaction will go back, look at the position of the regulator, and come back by abiding by the provisions of Nigerian laws, and the right thing will be done.”
However, a lawyer and well-informed energy analyst who is familiar with the issue said, “It is a very simple matter. When the idea to sell the assets came up, the NUPRC did not say no. It only insisted that the process stipulated in Section 14 of the 2019 Joint Operating Agreement, JOA, be followed.
“The JOA, which governs the joint venture operations between the co-founders, clearly stated that they reach an agreement among themselves as a condition for getting NUPRC’s consent.
“In line with the law, the commission had advised co-venturers to comply because the marriage-like kind of relationship they have cannot be dissolved without the agreement of the parties.
“So, the co-venturers have to get back to the regulator to say with one voice that they have agreed to sell the assets. This is the first step. There are also other steps, including the meeting of community obligations and commitment to the environmental restoration of producing sites.
“As a regulator, NUPRC upholds the law as contained in the Petroleum Industry Act, PIA, and guidelines on assignment of interests whatsoever, including share sales. This explains why it has already put in place a robust template to guide divestment in Nigeria’s oil and gas industry.
“It is very important that all parties respect the sanctity of the law and JOA between co-venturers in the deal. At the moment, I know that the Co-Venturers are still in the process of resolving their commercial issues and demonstrating respect for the sanctity of JOA. When the parties have reached an agreement and get back to the regulator, I am optimistic that the NUPRC will hold a workshop to review their submission and grant consent.
“NUPRC has intuitively put in place arrangements to make it easier for investors to close deals. I am also optimistic that the Commission will grant what is often referred to as subject-to-clearance consent within 30 days, provided the co-venturers demonstrate strong commitment to meeting their obligations.”
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