Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has rejected Nigeria’s President Muhammadu Buhari consent for Seplat’s acquisition of ExxonMobil’s shallow water assets. The rejection by the upstream regulator came hours after presidential spokesperson Femi Adesina said that President Buhari had approved the transaction.
The NUPRC, in a statement shared with the media on Monday, said the deal requires a regulatory approval instead of a presidential approval, and ExxonMobil has been notified that the deal has been declined.
“The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) affirms that status quo remains in respect of ExxonMobil/Seplat Energy share acquisition. Responding to media enquiries on latest development about the transaction, the Chief Executive of the NUPRC Engr. Gbenga Komolafe clarified that the Commission 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,” said a statement by NUPRC chief executive, Gbenga Komolafe.
“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,” he added.
The contradicting development, which pits the federal government against its parastatal, has stirred backlash from the Nigerian public, who say it depicts disorderliness in the government and lack of synergy between the presidency and federal agencies.
Statement issued by presidential spokesperson Femi Adesina said Buhari had approved the transfer in his capacity as Minister of Petroleum Resources and the approval was in consonance with the country’s drive for Foreign Direct Investment in the energy sector and considering the “extensive benefits of the transaction to the Nigerian Energy sector and the larger economy.”
The sale of Mobil Producing Nigeria Unlimited got into controversy earlier in the year after Exxon Mobil Corporation had entered a Sale and Purchase Agreement with Seplat Energy. The agreement is for the acquisition of the entire share of Mobil Producing Nigeria Unlimited, Mobil Development Nigeria Inc, and Mobil Exploration Nigeria Inc.
The purchase would enable Seplat Energy to scale up production by 95,000 barrels of oil a day from assets in a joint venture ExxonMobil runs with NNPC, per Premium Times.
The transaction was halted following a court ruling obtained by the Nigerian National Petroleum Corporation Limited. The court ruling had blocked the move to purchase the entire oil assets of Mobil Producing Nigeria Unlimited. The NNPC had argued that it reserves the right to be given consideration ahead of other companies in the sale of oil blocks by ExxonMobil.
MPNU is a local unit of ExxonMobil. Per Premium Times, the July 6 decision of the High Court of the Federal Capital Territory to block the sale, includes a share sale and purchase deal it struck with Seplat in February.
NNPC’s prayer was for the court had prayed the court 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.”
But in its response, Seplat Energy argued that neither itself nor Seplat Energy Offshore Limited was a party in the lawsuit, and insisted the share purchase agreement remained valid.
However, Buhari had taken side with the NNPC, suggesting that he did not approve of the deal. Thus, the statement of approval issued by the presidency becomes worrisome. There are indications that the approval must have come from people within the presidency, a development which lends credence to the concern that the president is not control of critical issues taking place in the country.