OIL & GAS: The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has contradicted the approval of the shares and asset acquisition deal reached by Nigeria`s Seplat and the ExxonMobil Corporation.

Basic Facts

• President on Monday gave his approval to a deal that allows ExxonMobil to sell the entire share capital of Mobil Producing Nigeria Unlimited (MPNU) to Seplat Energy Plc at the cost of $1.3 billion.
• This agreement was blocked by the Nigerian National Petroleum Corporation (NNPC), through a court injunction in a suit brought against ExxonMobil
• This presidential approval therefore, runs contrary to the position of the Nigerian National Petroleum Corporation (NNPC), which was said to have opposed the deal because it wanted the right of first refusal as a partner to ExxonMobil
• This presidential approval has now been contradicted by the statement made by Nigerian Upstream Petroleum Regulatory Commission (NUPRC)

What We know

Mr Gbenga Komolafe, Commission Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) have said that status quo remains in respect to ExxonMobil/Seplat Energy share acquisition.

The Commission Chief Executive (CCE), made this known in a statement on Monday in Abuja according to the News Agency of Nigeria (NAN).

Responding to media enquiries on latest development about the transaction, Komolafe claimed that NUPRC, in line with provisions of the Petroleum Industry Act 2021 was the sole regulator in dealing with such matters in Nigerian upstream sector.

He said as it were, the issue at stake was purely a regulatory matter and the commission had earlier communicated the decline of Ministerial Assent to ExxonMobil in this regard.

The CCE said as such, the Commission further affirmed that the status quo remained.

Notable Quote

Mr Gbenga Komolafe, Commission Chief Executive was quoted as saying, “That position remains the status quo and to the best of our knowledge as a regulator nothing has changed.

“The Commission is committed to ensuring predictable and conducive regulatory environment at all times in the Nigerian upstream sector,”

Catch-up

Clariform had reported the deal between Seplat and ExxonMobil covered Nigerian assets like oil mining lease 68, oil mining lease 69, oil mining lease 70 and oil prospecting licence.

Seplat by the deal was in effect acquiring the entire share capital of Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation, Mobil Development Nigeria Inc, and Mobil Exploration Nigeria Inc, both registered in Delaware, USA.

The agreement between the two parties was opposed by the state-owned oil company (NNPC), which sued ExxonMobil to stop it from selling its assets in Nigeria.

Seplat was not a party in the suit but was directly affected, when the deal was earlier blocked through a court order of injunction arising from the suit.

The deal suffered further setback when the federal government also earlier refused to approve the deal in May, this year, claiming that the decision was reached on the ground of “overriding national interest”.

Notwithstanding these oppositions, Seplat stock to what it saw as the legality of its deal with ExxonMobil, insisting on seeing through the acquisition.

Takeaway

This claim by Mr Gbenga Komolafe, Commission Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is a clear contradiction of the approval given by President Muhammadu Buhari on Monday.

However, it can also eventually become a face saving measure by those who never wanted the deal to come to reality.

This is particular because Mr Gbenga Komolafe only claimed that the status quo remains. He did not specifically disclose what the status quo refers to.

The Commission Chief Executive also did not deny that the President has approved the deal, or specifically contest the president`s power to give such approval.