- The petroleum regulatory agency has moved to stop the sale ExxonMobil's assets to Seplat contrary to approvals given by President Buhari
- The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) objected to the sale and said that runs contrary to the newly signed Petroleum Industry Act (PIA)
- ExxonMobil which is among other international oil companies leaving Nigeria, is expected to make about $1.28 billion from the deal
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has refused to approve plans by ExxonMobile to sell its assets to Seplat Energy for $1.billion.
According to a Reuters report, the agency stated that the reason behind its refusal to approve the deal was because the issue is ‘purely a regulatory matter’ and that the commission had earlier conveyed the decline of ministerial assent to ExxonMobile in this regard.
Deal against the law
The agency’s Chief Executive Officer, Gbenga Komolafe, had explained that Nigeria’s newly passed Petroleum Industry Act (PIA) gave it the sole right to approve such deals. The law states that only when the NUPRC approves the recommendation can the minister of petroleum make approvals.
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President Buhari is the Minister of Petroleum.
The law stipulated that licensed oil exploration firms cannot transfer their license, power or interests to a third power without the consent of the agency.
However, the law did not mention whether the approval of the Petroleum Minister can override that of the commission.
According to Business Insider, NURPC has been against ExxonMobil’s asset sale since the beginning of 2022 when the deal was first announced.
ExxonMobil to make cool cash from deal
ExxonMobil is expected to make about $1.28 billion from the deal.
Experts speak on federal government debt crises fear the country will soon run out of cash soon in 5 months
The firm is part of myriads of other international oil companies which have embarked on a divestment spree since the beginning of 2022. The firms cite vandalism and insecurity as part of the reason for pulling out of Nigeria.
The withdrawal of these firms has impacted the Nigerian economy very negatively with the country being unable to meet its daily OPEC crude oil quota of 1.77 million barrels per day.
TotalEnegies, Shell, Chevron and Eni are among the major international oil firms which have announced their intention to pull out of the Nigerian oil sector.
Why major oil companies are leaving Nigeria as Seplat acquires 100 percent of Mobil
Legit.ng reported that President Muhammadu Buhari approved the 100 per cent acquisition of the whole share capital of Mobil Oil Producing Nigeria Unlimited by Seplat energy Offshore Limited. This was disclosed in a tweet by the Presidency.
According to the tweet, Buhari authorised the acquisition in his capacity as Minister of Petroleum and is geared towards attracting foreign direct investment into the country.
The statement also gave directives to Exxon Mobil and Seplat to mitigate all environmental and abandonment liabilities.