There are indications that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the regulator of Nigeria’s upstream oil sector, is not responsible for the alleged delay in granting consent to the sale of $1.3 billion ExxonMobil’s 40 percent stake in Mobil Producing Nigeria Unlimited (MPNU)’s assets to Seplat Energy Plc, an Energy Analyst, Ibrahim Musa, has said.
He recalled that the intention of ExxonMobil to sell its oil assets to Seplat Energy Plc, a leading Nigeria’s independent energy company, started over two years ago but has not yet been concluded.
Quoting the NUPRC’s Chief Executive, , Gbenga Komolafe, while speaking at the Africa Oil Week (AOW), in Cape Town, South Africa, last October, he said that Komolafe had expected the deal to be concluded much earlier.
Komolafe said: “We are very optimistic that parties to the transaction will go back, look at the position of the regulator and come back by abiding by the provisions of Nigerian laws and the right thing will be done.”
However, a lawyer and well-informed energy analyst, who is familiar with the issue, said: “It is a very simple matter. When the idea to sell the assets came up, the NUPRC did not say no. It only insisted that the process stipulated in Section 14 of the 2019 Joint Operating Agreement (JOA), be followed.
“The JOA, which governs the Joint Venture operations between the Co-Venturers, clearly stated that they reach an agreement among themselves as a condition for getting NUPRC’s consent.
“In line with the law, the commission had advised co-venturers to comply because the marriage-like kind of relationship they have cannot be dissolved without the agreement of the parties.
“So, the co-venturers have to get back to the regulator to speak with one voice that they have agreed to sell the assets. This is the first step. There are also other steps, including the meeting of community obligations and commitment to the environmental restoration of producing sites.
“As a regulator, NUPRC upholds the law as contained in the Petroleum Industry Act (PIA), and guidelines on assignment of interests whatsoever, including share sales. This explains why it has already put in place a robust template to guide divestment in Nigeria’s oil and gas industry.
“It is very important that all parties should respect the sanctity of law and JOA between Co-Venturers in the deal. At the moment, I know that the Co-Venturers are still in the process of resolving their commercial issues and demonstrate respect for the sanctity of JOA. When the parties have reached an agreement and get back to the regulator, I am optimistic that the NUPRC will hold a workshop to review their submission and grant consent.
“NUPRC has intuitively put in place arrangements to make it easier for investors to close deals. I am also optimistic that the Commission will grant what is often referred to as Subject-to-Clearance Consent within 30 days, provided the Co-venturers demonstrate strong commitment to meeting their obligations.”
Similarly, the National President, Oil and Gas Service Providers Association of Nigeria, Mazi Colman Obasi, said that Komolafe-led team at the NUPRC has done so much to enable businesses in the industry.
“For instance, NUPRC developed regulations, giving meaning and intent to the PIA, to ensure that all bottlenecks associated with regulatory processes are eliminated or minimized, to entrench seamless upstream petroleum operations.
“The gazetted regulations include Petroleum Licensing Round Regulations 2022, Petroleum Royalty Regulations 2022, Conversion and Renewal (Licences and Lease), Nigeria Upstream Petroleum Host Communities Development Regulations 2022, Domestic Gas Delivery Obligations Regulations 2022, Nigeria Upstream Petroleum Measurement Regulations 2023, Production Curtailment and Domestic Crude supply Obligation Regulations, 2023, Frontier Basins Exploration Fund Administration Regulations, 2023, Nigeria Upstream Decommissioning and Abandonment Regulations 2023, Significant Crude Oil and Gas Discovery Regulations, 2023, Gas Flaring, Venting and Methane Emission (Prevention of Waste and Pollution) Regulations, 2023 and Nigeria Upstream Petroleum Unitization Regulations, 2023.
“The 14 draft regulations awaiting gazetting include Upstream Petroleum Fees and Rent Regulations, Acreage Management Drilling and Production Regulations, Upstream Environmental Remediation Fund Regulations, Upstream Petroleum Safety Regulations, Upstream Petroleum Environmental Regulations, Upstream Petroleum Measurement Regulations, Advance Cargo Declaration Regulations, Draft Upstream Commercial Operations Regulations, Draft upstream Petroleum Code of Conduct & Compliance Regulations, Draft Upstream Petroleum Development Contract Administration Regulations, Draft Upstream Revocation of licences and Lease Regulations, Draft Upstream Petroleum Assignment of Interest Regulations, Draft Nigerian upstream Petroleum (Administrative Harmonisation) Regulations and Draft Amendment to the Nigerian Upstream Petroleum Host Communities Development Regulations 2022.”