Seplat/Mobil Saga: More Trouble for Nigeria’s Drive For FDI As Investor’s Confidence wane
For several years Nigeria has been shouting that lack of investment in the oil and gas sector has been one of the major reasons why it has not been able to meet the quota allotted to it by the Organisation of Petroleum Exporting Countries (OPEC), and consequently it is experiencing dwindling revenue.
However, a recent action by the government in respect of acquisition deal between Seplat Energy and Mobil Producing Nigeria Unlimited has further widen the gap between the country and potential investors.
Analyst feared that if the deal does not pull through, investors would not look towards the direction of Nigeria, because of the lack of confidence in the government of Nigeria which the issue has generated . Some simply describe Nigeria as unserious country.
Toyin Akinosho, publisher of Africa Oil and Gas Report ,when interviewed said that it would be difficult to attract foreign investors to the Nigeria oil and gas going because of the way government has handled the issue of Seplat and Mobil
Lack of synergy among government agencies as demonstrated by recent confusion in the spat between the presidency and NUPRC concerning the deal has made industry operators to become apprehensive
According to analysts, this lack of coordination between the presidency, ministry of Petroleum Resources and the Nigeria Upstream Regulatory Commission (NUPRC) led the presidency to give consent to the deal which the NUPRC turned down within 12 hours of the presidency ‘s action, because of what NUPRC called regulatory infractions. The presidency latter reversed its action by agreeing with NUPRC.
For over15 years, the international oil and gas investors keep going to other African countries to invest in their hydrocarbon resources and leaving Nigeria out because of what they called lack of enabling environment.
Nigeria lost an estimated $50b worth of investment in the petroleum sector. This is was due to uncertainty over the 20 years’ non-passage of the Petroleum Industry Bill (PIB), lack of progress, and stagnation in the petroleum industry.
President Muhammadu Buhari stated this at a ceremony on passage of the PIA.
The President had okayed Seplat Energy Offshore Limited’s acquisition of Exxon Mobil shares.
Buhari’s approval was contained in a statement issued by presidential aide, Femi Adesina on Monday.
“In his capacity as Minister of Petroleum Resources, and in consonance with the country’s drive for Foreign Direct Investment in the energy sector, President Muhammadu Buhari has consented to the acquisition of Exxon Mobil shares in the United States of America by Seplat Energy Offshore Limited,” the statement read.
“Exxon Mobil had entered into a landmark Sale and Purchase Agreement with Seplat Energy to acquire the entire share capital of Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation, Mobil Development Nigeria Inc, and Mobil Exploration Nigeria Inc, both registered in Delaware, USA.”
According to Adesina, Buhari considered the extensive benefits of the transaction to the country’s energy sector and the economy in giving consent.
“The President, in commitment to investment drive in light of the Petroleum Industry Act, granted consent to the Share Sales Agreement, as requested by the parties to the transaction, and directed that the approval be conveyed to all the parties involved,” the statement added.
“Exxon Mobil/Seplat are expected to carry out operatorship of all the oil mining licenses in the related shallow water assets towards production optimization to support Nigeria’s OPEC quota in the short term as well as ensure accelerated development and monetization of the gas resources in the assets for the Nigerian economy.”
The Nigerian leader equally mandated that environmental and abandonment liabilities be adequately mitigated by Exxon Mobil and Seplat.
Confusion however set in when Nigerian Upstream Petroleum Regulatory Commission (NUPRC) issued a press stamen to counter the one that emanates from the presidency to the effect that President Muhammadu Buhari has consented to the deal.
According to the press statement from which was signed by the chief executive officer of the commission, Gbenga Komolafe, it reads: “The Nigerian Upstream Petroleum Regulatory Commission (NUPRC)affirms that status quo remains in respect of ExxonMobil/Seplat Energy share acquisition.”
“Responding to media enquiries on latest development about the transaction, the Chief Executive of the NUPRC Gbenga Komolafe clarified 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.”
“As it were, the issue at stake is purely a regulatory matter and the Commission had earlier communicated the decline of Ministerial assent to ExxonMobil in this regard. As such the Commission further affirms that the status quo remains.”
“The Commission is committed to ensuring predictable and conducive regulatory environment at all times in the Nigerian upstream sector.”
olusola Bello