By Zara Maisango
In a recent press statement, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) addressed public concerns regarding the divestment activities involving major international oil companies (IOCs) such as Oando, Eni-AGIP, Seplat, and Mobil. The Commission emphasized its commitment to transparency and adherence to the Petroleum Industry Act (PIA) 2021, which governs all regulatory activities within the Nigerian upstream petroleum sector.
The NUPRC detailed the current status of divestment approvals, starting with the recent ministerial consent granted for the divestment of NAOC's assets to Oando Petroleum and Natural Gas Company Limited (OandoPNGCL) and Oando Oil II Cooperatief U.A. (OANDO Cooperatief), as well as the transfer of Equinor Nigeria's assets to Chappal Energies. These approvals were processed according to the defined regulatory framework established by the PIA and met all necessary criteria for consent.
The statement also highlighted the ongoing divestment process involving Mobil Producing Nigeria Unlimited (MPNU) and Seplat Energy Offshore Limited (Seplat). Unlike the earlier approvals, the MPNU-Seplat transaction is currently undergoing a comprehensive due diligence review, expected to be completed within the 120-day timeline stipulated by the PIA. The Commission assured the public that this divestment would follow the same rigorous procedures applied to previous transactions, including evaluations based on technical capacity, financial viability, legal compliance, and other key considerations outlined in the Upstream Asset Divestment and Exit Guidance Framework.
The Commission elaborated on the steps taken during the NAOC-Oando transaction, starting from NAOC's initial notification of intent to divest on May 16, 2023, to the ministerial consent granted in January 2024. The NUPRC worked closely with external consultants to ensure all potential liabilities associated with the assets were adequately addressed, demonstrating a commitment to thorough evaluation and due diligence.
Similarly, the Equinor-Chappal Energies transaction followed a parallel process, ensuring compliance with all regulatory requirements and the Petroleum Industry Act.
Regarding the MPNU-Seplat divestment, the NUPRC noted that the initial application submitted by MPNU in February 2022 was not approved due to the absence of a waiver of pre-emption rights from the Nigerian National Petroleum Corporation (NNPC), a key partner in the joint venture. However, following the resolution of a legal dispute between NNPC and MPNU in June 2024, the Commission received a fresh application from MPNU, which is now undergoing due diligence review.
The NUPRC reassured stakeholders and the public that all divestment activities are conducted in compliance with Nigerian law and international best practices. The Commission remains committed to its statutory mandate to regulate the upstream petroleum sector with professionalism and integrity, guided by the Petroleum Industry Act.
The statement concluded with a commitment from the NUPRC to maintain transparency and uphold the rule of law in all its regulatory activities, ensuring that the interests of all stakeholders are protected in line with the provisions of the PIA.
Signed: Olaide Shonola (Mrs.)
Head, Public Affairs Unit
NUPRC
August 26, 2024
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