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Nigeria approves Eni’s divestment of Nigerian subsidiary to Oando

Oando says to file 2022 audited financials on August 31, 2023

The federal government has approved Eni’s proposal to divest its Nigerian wholly-owned subsidiary, Nigerian Agip Oil Company (NAOC), to Oando PLC, a development that marks a significant move in Nigeria’s oil and gas sector.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) announced the completion of the deal at Nigeria’s Oil and Gas Week in Abuja, maintaining that the signing ceremonies for the deal would come up any moment.

“For some of you who were at the panel session on Monday, the Chairman of IPPG (Independent Petroleum Producers Group) raised issues about the need for us to give update on the divestments programmes on-going. Now, I am here to give you real-time update on the  major divestments in Nigeria,” Gbenga Komolefe, the CEO of NUPRC said on Tuesday.

He added, “ NAOC-Oando divestment has been concluded. Signing ceremony will come up any moment”.

Ministerial consent for Seplat/ExxonMobil deal  outstanding

Currently, NAOC holds stakes in four onshore blocks comprising Oil Mining Licenses 60, 61, 62, and 63; in two power plants, Okpai 1 and 2; and in two onshore exploration leases – Oil Prospecting License 282 and OPL 135.

The transaction, however, excludes NAOC’s interest in the Shell Production Development Company Joint Venture (SPDC JV) as it will be retained in Eni’s portfolio.

Read also: NNPC pays N140.55bn for Oando-branded retail stations, jetty, others

Eni said it continue its presence in Nigeria through Nigerian Agip Exploration and Agip Energy and Natural Resources and will focus on operated offshore activities.

Concerning the latest information on the $1.2 billion ExxonMobil downstream assets sale to Seplat Energy, Komolafe said  NUPRC is yet to receive correspondence on ministerial consent for the deal.

“On the  MPN – SEPLAT expression of interest on commitment to apply for ministerial consent, we are yet to receive any as we speak,” Komolafe said.

That’s after the Nigerian National Petroleum Company (NNPC) Limited signed a settlement agreement for the divestment of the international oil major’s $1.28 billion stake in Mobil Producing Nigeria Unlimited (MPNU) to Seplat Energy Plc, in what is a precursor to regulatory approval.

The agreement, which had stalled for two years was expected to get the green light after visits by top executives from the oil major to President Bola Tinubu, a former ExxonMobil staff.

Disagreements and a court ruling that temporarily prevented ExxonMobil from selling its assets to Seplat Energy held back the deal from going over the line.

Also at the NOG event, International Oil Companies (IOCs)  advised the federal government to prioritise competitive fiscal terms over attractive options in the race to improve investment in Nigeria’s oil and gas sector.

This shift in focus, they argue, would make Nigeria’s oil assets more appealing to investors and encourage increased exploration and production activities.

“I hear a lot people say but your country just signed the Petroleum Industry Act. I agree, but it’s difficult to compete with international competitors for investment with the current fiscals,” Elohor  Aiboni, managing director, of Shell Nigeria’s Exploration and Production Company Limited, said at this year Nigeria’s Oil and Gas event in Abuja.

Read also: ENI sells stake in Nigerian Agip Oil Company to Oando

Prioritise competitive fiscal, IOC says 

She added, “The current fiscals will not get us anywhere. Discussion are ongoing but we need to fast track this development”.

Jim Swartz, chairman and managing director of Chevron Nigeria’s mid-Africa business unit said it’s not enough to have an attractive fiscal, it needs to be attractive.

“Deepwater business is a global business; we need to be more competitive not just attractive” Swartz said.

Adesua Dozie, vice-chairman of the Boards of the Companie at ExxonMobil said Nigeria needs predictability and stability of investment over the lifecycle of deepwater projects.

“We need projects that are globally competitive. The  major challenge we face as IOCs is taking globally competitive projects to our headquarters,” Dozie said.

Nigeria, typically Africa’s largest oil exporter, has struggled to pump in the past several years due to theft and years of under-investment.

Nearly all international oil majors, including Shell and Exxon, have onshore sales underway amid the theft and oil spills, perpetual clashes with communities and more focused exploration budgets.

Oil majors in Nigeria have long faced legal challenges over Niger Delta spills, which they mostly blame on sabotage and vandalism of pipelines and illegal refining.