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Confusion As NURPC Rejects Buhari’s Approval Of Seplat/Exxon Mobil Acquisition Deal

President Muhammadu Buhari
President Muhammadu Buhari

August 09, (THEWILL) – The Nigerian Upstream Petroleum Regulatory Commission (NUPRC), has rejected the consent for the approval of the acquisition of Exxon Mobil Shares by Seplat Energy.

THEWILL reported that President Muhammadu Buhari, had on Monday, given approval to the acquisition of Exxon Mobil shares by Seplat Energy Offshore Limited, in his capacity as Minister of Petroleum Resources.

According to a statement by Special Adviser to the President on Media and Publicity, Femi Adesina, the consent was in consonance with the country’s drive for Foreign Direct Investment (FDI) in the energy sector.

But in a swift rejection of the decision of the president, the NUPRC declared that in line with the provisions of the Petroleum Industry Act 2021, it is the sole regulator in dealing with such matters in the Nigerian upstream sector.

While approving the deal, President Buhari had cited the Petroleum Act of 1969 as a basis for its own “Ministers” consent. However, the NUPRC cited the PIA as the source of its own powers, suggesting that the PIA was the reference act for the transaction.

The agency, in a statement signed by its Chief Executive, Gbenga Komolafe, claimed that the “status quo” remained the same, revealing that as the sole regulator in the upstream sector, it was by law the sole decision maker in this transaction and not the president.

Kolawole said the matter was a regulatory one and nothing had changed after the Agency had earlier notified ExxonMobil the transaction had been declined.

“The Commission (NURPC) in line with the provisions of the Petroleum Industry Act 2021, is the sole regulator in dealing with such matters in the Nigerian upstream sector.

“As it were, the issue at stake is purely a regulatory matter and the Commission had earlier communicated the decline of ministerial assent to ExxonMobil in this regard. As such, the Commission further affirms that the status quo remains.

“The Commission is committed to ensuring a predictable and conducive regulatory environment at all times in the Nigerian upstream sector.

“The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) affirms that status quo remains in respect of ExxonMobil/Seplat Energy share acquisition”, the statement declared

THEWILL recalls that Seplat Energy Plc, had on February 25, announced an agreement to acquire the entire share capital of Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation, Delaware, for $1.28 billion.

The transaction, which entails the acquisition of ExxonMobil Nigeria’s entire offshore shallow water business, suffered a setback after the state-owned Nigerian National Petroleum Corporation Limited (NNPC-Ltd), asserted a right of first refusal on the deal. As a joint venture partner, NNPC argued it retained the right to be allowed to buy oil blocks sold by ExxonMobil ahead of any competitor or private firm.

Also, the NUPRC rejected the deal claiming that it “failed to follow the procedure for assignments laid down in the Guidelines by not providing the requisite notices to the Commission at all relevant stages of the transaction. Even if the transaction has been between Seplat Energy Offshore Limited and the MPNU shareholders, responsibility to ensure compliance with Nigerian laws, rules and regulations always remain that of MPNU, the entity that was awarded the assets.”

Seplat Energy in July, said NNPC Ltd. won a court decision to block its quest to purchase the entire oil assets of Mobil Producing Nigeria Unlimited (MPNU), a local unit of oil major ExxonMobil.

The court decision on July 6, was temporary and forbade MPNU and the defendants from consummating any asset disposal in MPNU, not excluding the share sale and purchase deal it struck with Seplat in February.

NNPC had prayed the court, State High Court of the Federal Capital Territory, to declare that a conflict happened between the state-owned oil company and MPNU over the “interpretation of preemption rights under their Joint Operating Agreement (“JOA”) and order NNPC and MPNU to arbitration as required by the JOA.”

Seplat Energy said neither itself nor Seplat Energy Offshore Limited was a party in the lawsuit, and insisted the share purchase agreement remained valid.