The Nigerian Upstream Petroleum Regulatory Commission has announced the ministerial approval granted to the divestment by Nigerian Agip Oil Company (NAOC) to Oando Petroleum and Natural Gas Company Limited (Oando PNGCL) and by Equinor Nigeria to Chappal Energies.
The Commission, in a statement signed by Olaide Shonola, head, punlic affairs unit explained that the approvals given to the NAOC-Oando and Equinor-Chappal divestments were in accordance with the Petroleum Industry Act (PIA) 2021, defined regulatory framework, and standard consent approval process set by the Commission under the PIA.
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According to her, the divestment byMobil Producing Nigeria Unlimited (MPNU) to Seplat Energy Offshore Limited (Seplat) is also currently undergoing the same consent approval process and is expected to be completed within the 120-day timeline provided by the PIA.
“Perhaps it would be necessary to give a further breakdown of the processes that saw the divestment of assets by NAOC to the OANDO Entities as an example and the divestment of shares in Mobil Producing Nigeria Unlimited (MPNU) to Seplat.
“To be sure, the consent to Oando and Chappal Energies were fulfilled according to the regulatory process.
Consequently, the process was conducted in compliance with the requirements of relevant legislations, regulations and guidelines including the Petroleum Act, Petroleum Industry Act, Petroleum Drilling and Production Regulations, and the Upstream Asset Divestment and Exit Guidance Framework.
“The Divestment Framework evaluated the divestments based on Technical Capacity, Financial Viability, Legal Compliance, Decommissioning and Abandonment, Host Community Trust and Environmental Remediation, Industrial Relations and Labour Issues, as well as Data Repatriation. Additionally, NAOC obtained a waiver of pre-emption and consent to the divestment from NNPC, their partner on the blocks,” the statement read.
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It stated that to ensure due diligence, the Commission, working with external consultants identified significant pre-sale liabilities inherent in the assets to be divested by NAOC and proactively devised measures to ensure that the identified liabilities are adequately provided for.
“The Equinor-Chappal divestment followed the same regulatory process as for the NAOC-Oando transaction.”
On a comparative basis, MPNU through a letter dated February 24, 2022, notified the Commission of its intention to assign 100% of its issued shares to Seplat Offshore Energy Limited, adding that the Commission did not consent to this assignment because MPNU failed to obtain a waiver of pre-emption rights as well as the consent of NNPC, its partner on the blocks to the divestment.
“It is worth pointing out that NNPC’s right to pre-emption and consent under the NNPCL/MPNU Joint Venture Joint Operating Agreement was the subject of Suit No: FCT/HC/BW/173/2022 Nigerian National Petroleum Company Limited versus Mobil Producing Nigeria Unlimited, Mobil Development Nigeria Inc., Mobil Exploration Nigeria Inc. and Nigerian Upstream Petroleum Regulatory Commission.
“In June 2024, NNPC and MPNU resolved their dispute with NNPC, and MPNU, by letter dated 26 June 2024 informed the Commission of the resolution of the dispute. Upon resolution of this dispute, the Commission communicated its no-objection decision to the assignment via a letter dated July 4, 2024 and requested MPNU to provide information and documentation required under the Commission’s due diligence checklist to enable the Commission conduct its due diligence as required under the PIA.”
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The Commission explained that MPNU by letter dated 18 July 2024 provided the information requested it requested adding that MPNU’s application to the Commission for consent is currently undergoing due diligence review, under the same Divestment Framework applied to the NAOC-Oando and Equinor-Chappal divestment.
“The Commission’s due diligence process is ongoing and within the 120-day timeline required by the PIA.
“Given the above, the Commission wishes to assure the public that the process for approving divestment applications is guided by the provisions of the PIA and clearly defined frameworks in the assignment regulations, guided by international best practices,” it added.
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