• Sunday, February 25, 2024
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BusinessDay

Assets of divesting companies are still unsold, NUPRC clarifies

Nigeria has potential to produce 2.2m oil bpd – NUPRC boss

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has clarified that no asset of the International Oil Companies (Divesting Companies) have been sold, as the Commission is still carrying out due diligence on the transactions.

Gbenga Komolafe, the commission’s chief executive stated this in a notice issued to BusinessDay on Saturday.

According to him, the Commission is currently carrying out due diligence on the transaction to ensure that the divestment does not result in unwarranted liabilities for the Federal Government of Nigeria.

He said, “The attention of the Nigerian Upstream Petroleum Regulatory Commission has been drawn to the ongoing discussions in the social media suggesting that certain International Oil Companies (Divesting Companies) have completed the sale of some of their oil and gas assets to some indigenous Nigerian companies.

Transactions must not result in liability for FG – NUPRC

He clarified that oil and gas assets in Nigeria could only be transferred in accordance with the requirements of the Petroleum Industry Act (PIA) 2021 where applicable, the guidelines and procedures for obtaining the minister’s consent to the assignment of Interest in oil and gas assets, 2021.

According to him, “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 licence or lease in accordance with the terms of the SPA. The transfer can only be consummated upon the grant of Ministerial Consent to the transfer, following a recommendation from the Commission, and satisfaction of the conditions for the grant of the consent by the Minister.

“Furthermore, the Commission’s recommendation to the Minister to grant Ministerial Consent for the transfer of a licence or lease will be based on a detailed and diligent review of the transaction by the Commission, to ensure the acquirers have the requisite competence in technical and financial ramifications, fulfilment of decommissioning and abandonment obligations; sustainability of environmental, social and corporate governance, including compliance with host community obligations, industrial and labour relations framework, confirmation that there are no legal encumbrances hindering the consummation of the transaction and that the acquirers are fit and proper persons and acceptable to the Federal government of Nigeria.

“These are criteria for the continued operational efficiency and effectiveness in the operations of the assets to ensure a sustainable increase in Nigeria’s oil and gas reserves and production.

“The Commission wishes the public to note that all the Divesting Companies and their potential assignees are familiar with the divestment process under the Applicable Laws and are currently complying with the relevant requirements

“Accordingly, the general public is invited to take notice that the assets purported to have been sold by the Divesting Companies cannot be deemed sold yet, as the Commission is currently carrying out due diligence on the transaction to ensure that the divestment does not result in unwarranted liabilities for the Federal Government of Nigeria.”