Metallon’s position on LEKOIL uncertain ahead of EGM

South Africa based Metallon Corporation’s bid to take over the management of LEKOIL may have suffered a setback as the Nigerian government is objecting to the move.

In a letter dated December 30, signed by Timipre Sylva, minister of State for Petroleum Resources, seen by BusinessDay, the government said the transaction had not complied with its guidelines.

“We are of the view that such a significant change of shareholding can only be carried out in close adherence with the Guidelines and Procedures for obtaining Consent to the Assignment of interest in Oil and Gas Assets dated 11th August 2014, issued pursuant to the Powers of the Honourable Minister of Petroleum Resources under the Petroleum Act.”

The minister further said articles 3 & 4 of the Guidelines of Ministerial Consent sets out the key elements of assignment of ownership and control of interests in Oil and Gas Assets and the requirements for securing Ministerial Consent and, warning of consequences for non-compliance.

Metallon is seeking to acquire Lekoil shares in order to control its Nigeria based assets.

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This came hours to an Extraordinary General Meeting (EGM) in which Metallon hopes to alter the management of Lekoil by imposing three directors of its choosing in the company’s board today.

A 15.10percent shareholder in Lekoil, Metallon increased its stake in early 2020, in a bid to stage a takeover of the company citing none performance of Lekoil’s board and decline in the company’s value on the London Stock Exchange.

“We cannot over-emphasize the consequences of non-compliance with the Ministerial Guidelines,” Chief Sylva cautioned in the letter.

In a related development, Lekoil has issued a statement indicating that “in the event that Metallon’s acquisition of its shareholding has not complied with Nigerian legislation and, in the absence of any suitable remedial action, sanctions (which ultimately can include Licence revocation) could be imposed directly on the company by the Ministry of Petroleum Resources.”

In the statement the company confirms that it has notified Metallon of the letter from the Federal Ministry of Petroleum Resources.

Lekoil states that it will provide an update on the matter in due course.

Isaac Anyaogu

Isaac Anyaogu is an Assistant editor and head of the energy and environment desk. He is an award-winning journalist who has written hundreds of reports on Nigeria’s oil and gas industry, energy and environmental policies, regulation and climate change impacts in Africa. He was part of a journalist team that investigated lead acid pollution by an Indian recycler in Nigeria and won the international prize - Fetisov Journalism award in 2020. Mr Anyaogu joined BusinessDay in January 2016 as a multimedia content producer on the energy desk and rose to head the desk in October 2020 after several ground breaking stories and multiple award wining stories. His reporting covers start-ups, companies and markets, financing and regulatory policies in the power sector, oil and gas, renewable energy and environmental sectors He has covered the Niger Delta crises, and corruption in NIgeria’s petroleum product imports. He left the Audit and Consulting firm, OR&C Consultants in 2015 after three years to write for BusinessDay and his background working with financial statements, audit reports and tax consulting assignments significantly benefited his reporting. Mr Anyaogu studied mass communications and Media Studies and has attended several training programmes in Ghana, South Africa and the United States