Gbenga Komolafe, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), has expressed optimism that parties to the Share Sale of the local unit of Exxon Mobil would engage themselves within Nigerian law and follow due process if they are to conclude the effective transfer of JV assets from Exxon Mobil to Seplat.
Komolafe, who spoke to reporters on the sidelines of the Africa Oil Week, in Cape Town, South Africa, emphasised that the stalemate on the transaction was purely a commercial and not a regulatory issue.
He urged co-venturers NNPC and Exxon Mobil to play by the law.
The regulator, according to ThisDay Newspaper had last year refused to approve the $1.28 billion sale, a deal some in the industry say is key to getting much-needed investment into Nigeria’s oil and gas sector.
“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,” Komolafe said.
He said once Exxon had made proper agreements with its joint-venture partners in the assets, “the regulator will do what it needs to”.
NNPC had opposed the sale, arguing it had pre-emptive rights to the assets. But talks have continued between parties since the advent of the administration of President Bola Tinubu some five months ago.
Nigeria, Africa’s largest oil exporter, relies on petroleum for 90 per cent of its foreign exchange and half its budget. But production has declined in recent years due to underinvestment and theft. Several international oil majors are looking to sell onshore assets, but those deals have run into legal and regulatory hurdles.
Seplat Energy recently said it remains committed to purchasing the oil and gas assets from Exxon Mobil Corporation by completing the deal.
The Lagos and London-listed company is hoping that President Bola Tinubu, would adopt a different approach from his predecessor, who reversed an initial decision to approve the transaction.
“We’re still interested in the assets,” Seplat Chief Executive Officer, Roger Brown, had said in an interview at the firm’s UK office.
“We still like the company we’re buying. We think it’s a game changing operation,” he added.
Under the deal unveiled in February 2022, Seplat agreed to pay $1.3 billion for an Exxon unit that holds a 40 per cent operating stake in four shallow-water licenses in a purchase that would almost quadruple the independent company’s oil output to more than 130,000 barrels per day.
If the transaction goes ahead, it would be one of the biggest divestments in Nigerian history since energy majors like Shell Plc started offloading unwanted assets in the late 2000s, the Bloomberg report added.
Former President Muhammadu Buhari, who doubled as Nigeria’s oil minister, had endorsed the sale before swiftly rowing back after the country’s energy regulator rejected his approval.
Africa Oil Week is attended by the crème of the oil industry from Africa and around the world.
