The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has said that the ownership of oil and gas assets in Nigeria may only be transferred from one entity to another with the consent of the minister.
According to Gbenga Komlafe, chief executive of the NUPRC, the law is spelled out by the 2021 Petroleum Industry Act (PIA).
He made this known in a statement released on Saturday while addressing the ongoing social media discussions regarding the completion of sales of assets of some international oil companies to indigenous companies.
He said, “NUPRC wishes to clarify that oil and gas assets in Nigeria can only be transferred in accordance with the requirements of the PIA, Petroleum Act (where applicable), the Guidelines and Procedures for Obtaining Minister’s Consent to the Assignment of Interest in Oil and Gas Assets, 2021 (together the “Applicable Laws”).
“Under Nigerian law, while the entering into of a Sale and Purchase Agreement (SPA) between an assignor and an assignee constitutes an agreement to sell the relevant license or lease in accordance with the terms of the SPA, the transfer can only be consummated upon the grant Of Ministerial Consent,” he added.
In addition, Komolafe said that the Commission would conduct a careful and comprehensive analysis of the transaction before recommending to the Minister that Ministerial Consent be granted for the transfer of a license or lease.
He said that this process will determine the technical and financial competence of the acquirers, their adherence to environmental, social, and corporate governance sustainability, and their commitment to meeting decommissioning and abandonment commitments.
According to him, the assessment would also ensure adherence to the host community obligations, industrial and labor relations frameworks, and the lack of any legal obstacles preventing the transaction from being completed.