President Muhammadu Buhari on Wednesday backed the position of the Nigerian Upstream Regulatory Commission (NUPRC) in reversing consent earlier given for the Seplat/ExxonMobil deal, blaming the confusion on poor coordination among government agencies, a government spokesperson said.
The deal was for the acquisition of the entire shares of Mobil Oil Producing Unlimited, the Nigerian unit of American oil major, ExxonMobil at the cost of $1.28billion.
“It has become clear that the various agencies involved in the decision had not coordinated well among themselves and having looked at all of the facts with all of the ramifications, the president decided the position of the regulator is to be supported,” spokesperson Garba Shehu told PREMIUM TIMES Wednesday.
The NUPRC had on Monday said the proposed takeover of Mobil Producing Nigeria Unlimited by Seplat, an indigenous oil firm, was a regulatory matter and it had notified ExxonMobil the transaction could not go through.
In its earlier letter to Seplat Energy Plc and Mobil Petroleum Nigeria Unlimited (MPNU), the ExxonMobil Nigerian unit, the NUPRC claimed the president withheld ministerial assent based on non-compliance with guidelines to transfer assets, failure to notify the Commission during all the stages and Seplat not being the right person to apply for Ministerial consent.
“Thus, regardless of the mode of the transaction, MPNU, remains, to all intents and purposes, the assignor under Nigerian law and is the proper person to bring an application for Ministerial consent to the transaction, not Seplat. Consequently, you are hereby requested to revert to MPNU, the assignor, to receive updates on your application,” the Commission stated in its rejection letter to Seplat in May.
However the presidency on Monday issued a release after dispatching a letter to Seplat Energy conveying ministerial consent to the deal.
Analysts say the handling of the matter does not bode well for future investments into Nigeria’s oil and gas sector already plagued with teething challenges including underinvestment, crude theft and general insecurity.