The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has overruled President Muhammadu Buhari’s approval of the acquisition of Exxon Mobil’s $1.28 billion asset by Seplat Energy Offshore Ltd, affirming that the status quo remains the same concerning ExxonMobil/Seplat Energy share acquisition.
Mr. Gbenga Komolafe, Commission Chief Executive (CCE), NUPRC disclosed this in a statement on Monday, emphasizing that the matter was regulatory. He stated 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.
President Buhari had initially approved a deal that will enable Seplat Energy to purchase Exxon Mobil shares. This is according to a statement in a tweet by the presidency stating that Buhari had authorized the transaction in his capacity as the Minister of Petroleum.
“In his capacity as Minister of Petroleum Resources, and consonance with the country’s drive for foreign direct investment in the energy sector, President @MBuhari has consented to the acquisition of the entire share capital of Mobil Producing Nigeria Unlimited by Seplat Energy Offshore Limited,” the statement stated.
According to a statement by Femi Adesina, Special Adviser to the President on Media and Publicity, the consent is also in consonance with the country’s drive for Foreign Direct Investment (FDI) in the energy sector.
The countervailing decision by NUPRC which came a few hours after presidential spokesperson Femi Adesina said in a statement that Mr. Buhari had approved the sale to Seplat, an indigenous oil company, has however raised concerns about the matter. This high-profile disagreement may discourage investment in the country’s struggling oil and gas industry.
What You Should Know
Earlier this year, Seplat Energy previously entered into a Sale Agreement with Exxon Mobil to acquire the entire share capital of Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation, Mobil Development Nigeria Inc, and Mobil Exploration Nigeria Inc.
NNPC contended that it had the right to be allowed to buy assets sold by any firm. In this case, NNPC has an interest in ExxonMobil’s assets and wants to be placed ahead of any competitor or private firm.
The transaction has since suffered a setback after the state-owned Nigerian National Petroleum Corporation Limited asserted a right of first refusal on the deal.