9th August, 2022
President Muhammadu Buhari violated the Petroleum Industry Act (PIA) 2021, in assenting to the acquisition of ExxonMobil’s oil assets by Seplat Energy, the regulatory agency said Monday night.
A statement from the presidency on Monday noted that the Minister of Petroleum, President Buhari had granted assent to the deal in which Seplat will acquire a 40 per cent stake of ExxonMobil oil assets around Akwa Ibom.
The statement cited the Petroleum Industry Act (PIA) 2021, as an incentive to drive Foreign Direct Investment and raise oil production from the assets.
However, the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) Engr. Gbenga Komolafe rejected President Muhammadu Buhari’s assent to the acquisition.
Komolafe, in a statement, Monday night, clarified that the Commission in line with the provisions of the PIA 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,” the NUPRC noted.
The NNPC now NNPC Ltd had been in a tussle with ExxonMobil over the transaction insisting that it has the first right of refusal, being in a joint venture with Mobil.
The Akwa Ibom government had also scolded the international oil company for proceeding on the assets lay off without recourse to the state hosting them.
Dr. Chioma Nwachuku, Director, External Affairs & Sustainability for Seplat Energy Plc celebrated the approval of the acquisition by President Buhari, as the minister of petroleum.
The statement issued in Lagos and London simultaneously read: Seplat Energy Plc, a leading Nigerian energy company listed on the Nigerian Exchange and the London Stock Exchange, is pleased to announce that it has received a letter from the Honourable Minister of State for Petroleum Resources (“HMSPR”) notifying Seplat Energy that His Excellency, President Muhammadu Buhari has graciously approved that Ministerial Consent be granted to Seplat Energy Offshore Limited’s (a Seplat Energy subsidiary) cash acquisition of the entire share capital of Mobil Producing Nigeria Unlimited (“MPNU”) from its shareholders, Mobil Development Nigeria Inc (“MDNI”) and Mobil Exploration Nigeria Inc (“MENI”), being entities of Exxon Mobil Corporation registered in Delaware, USA (“ExxonMobil”).
As announced on 25 February 2022, Seplat Energy had agreed to acquire the entire share capital of MPNU for a purchase price of $1.283 billion plus up to $300 million contingent consideration. The transformational transaction will create one of the largest independent energy companies on both the Nigerian and London Stock Exchanges, and bolster Seplat Energy’s ability to drive increased growth, profitability and overall stakeholder prosperity.
The approval is given by His Excellency, President Muhammadu Buhari in his capacity as the Honourable Minister of Petroleum Resources (“HMPR”), with the granting of Ministerial Consent pursuant to the powers of the Minister under Paragraphs 14-16 of the First Schedule of the Petroleum Act, 1969. A separate announcement from the State House was released earlier.
In the letter, the President as HMPR directed that the HMSPR shall convey Ministerial Consent to all relevant parties, including but not limited to the Nigerian Upstream Petroleum Regulatory Commission (“NUPRC”), the Nigerian National Petroleum Company Limited (“NNPC”), the ExxonMobil companies, the Federal Competition and Consumer Protection Commission (“FCCPC”), and Seplat Energy/Seplat Energy Offshore Limited. The President further directed that the HMSPR shall ensure that the ExxonMobil/Seplat Energy operating entity (being MPNU) carries out operatorship of all the OMLs in the related shallow water assets to optimise production in support of Nigeria’s OPEC quota in the short term as well as ensure accelerated development and monetisation of the gas resources in the assets for the Nigerian economy. The Board and Management of Seplat Energy thank His Excellency, President Muhammadu Buhari, for the Ministerial Consent to this landmark acquisition of the entire share capital of MPNU.