Business - Business & Economy - News - Oil & Gas - August 8, 2022

ExxonMobil acquisition: Intrigues, confusion over Buhari’s nod to Seplat Energy, as NUPRC says status quo remains

The regulatory authority declared its position remains that nothing has changed from the earlier decision by the President to decline ministerial consent to the sale, contrary to the position by the supervising ministry.

By Bassey Udo

Highwire intrigues and confusion appear to trail Monday’s purported presidential approval granted Seplat Energy to proceed with its planned acquisition of the shares of ExxonMobil Corporation subsidiary in Nigeria.

The upstream petroleum regulatory authority, the Nigeeian Upstream Petroleum Regulatory Commission (NUPRC), insists the status of the transaction remains unchanged as the President is yet to rescind its earlier decision to deny his consent to the transaction.

But, the Minister of State for Petroleum Resources, Timipre Sylva, is arguing that the President has already exercised his prerogative by granting his consent in line with the provisions of the Petroleum Industry Act (PIA).

NUPRC says status quo remains
In a statement reacting to the announcement by Seplat Energy that it received a presidential approval to proceed with the acquisition of the Exxon Mobil in Nigeria, the NUPRC through its Chief Executive Officer, Gbenga Komolafe, said the position of the Commission was that the status quo remains, as nothing has changed.

Komolafe clarified Status quo to be the decline of the ministerial consent by the President to the share acquisition of ExxonMobil by Seplat Energy.

“This position has been communicated by the Commission to ExxonMobil. So, as things stand, nothing has changed as far as the Commission is concerned, in line with the provisions of the Petroleum Industry Act.

Titled “Status Quo Remains on Share Sale By ExxonMobil to Seplat Energy”, the statement read: “The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) affirms that status quo remains in respect of ExxonMobil/Seplat Energy share acquisition.

“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,” Komolafe said.

Minister of State reacts
However, when contacted, Slyva said he was not aware of what the NUPRC was saying over an issue the President has already given approval.

“If the President has already approved a transaction in his capacity as the Minister of Petroleum Resources as stipulated by law, it is not the place of the NUPRC to go to the press in whatever capacity to issue a counter statement without clearance. If the NUPRC has a counter approval from the President, it will be understandable. But at this moment, there is no such approval.

“It is very sad that the NUPRC would be issuing a statement on the issue without asking questions with supervising ministry. This is unbecoming and embarrassing to controvert the President in that way over a matter he has already given approval,” Sylva said

Seplat announces Presidential consent
The management of the indigenous oil and gas company quoted in both the Nigerian and New York Stock Exchanges had announced its receipt of the formal consent by President Muhammadu Buhari giving the official nod for the acquisition plan to go ahead, despite a subsisting interest by the Nigerian National Petroleum Company Limited.

Backstory
In February, Seplat Energy announced a $1.58 million deal to acquire the entire share capital of Mobil Producing Nigeria Unlimited from ExxonMobil Corporation.

Although the deal was subject to formal regulatory and ministerial approvals, Seplat Energy confirmed it already signed a Sale and Purchase Agreement with ExxonMobil for the acquisition of its shares, apart from an additional contingent considerations.

Following the announcement, the NNPC, which has been a major joint venture partner with ExxonMobil from inception of the company in Nigeria, kicked against the deal.

The company, which was unveiled a fortnight ago as Nigeria’s independent national commercial oil and gas entity, made a strong case for its long partnership with ExxonMobil as a joint venture partner to have been factored into the decision on the sale, by granting it the pre-emptive right of first refusal to the acquisition.

Although the upstream petroleum industry regulator, the Nigerian Upstream Petroleum Commission (NUPRC) confirmed in May it had received a letter from Seplat Energy about the deal, it said the mandatory regulatory consent was declined, as the debate continued over whether the sale was a corporate asset-based transaction,

While the controversy continued, the NNPC went ahead to file a case in the High Court of the Federal Capital Territory, Abuja to stop ExxonMobil from going any further with the transaction.

In July, the Court, based on the NNPC application, granted an ex-parte order of interim injunction restraining Mobil Producing Nigeria and its shareholders from completing the Share Sale and Purchase Agreement previously signed with Seplat Energy.

In compliance with the court order, the NUPRC withheld its consent till further notice, pending the resolution of the dispute declared by the NNPC against Mobil Producing Nigeria on their interpretation of pre-emptive rights under their Joint-Operating Agreement (JOA).

However, amid the subsisting dispute, Seplat Energy announced on Monday that President Muhammadu Buhari, in his capacity as the Petroleum Minister, had issued a formal approval for the acquisition to proceed.

Seplat Energy said it received the letter from the Minister of State for Petroleum Resources, Timipre Sylva, notifying the company of the President’s decision to grant Ministerial Consent to Seplat Energy Offshore Limited’s 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.

Seplat Energy was quoted as saying that the approval was given by the President in his capacity as the Minister of Petroleum Resources, 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.

EDITOR’S NOTE:
This report was updated with the response from the Minister of State for Petroleum Resources, Timipre Sylva.

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