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Nigeria’s oil regulator overrules Presidency on $1.28bn Seplat/Mobil deal

Nigeria’s Presidency and the Nigerian Upstream Petroleum Regulatory Commission have disagreed over the $1.283bn sale and purchase transaction between Seplat Energies and Mobil Producing Nigeria Unlimited.

Nigeria’s national oil firm, the Nigerian National Petroleum Company (NNPC), which has been in a joint venture with Mobil, had blocked the company’s attempt to sell off its assets to Seplat, arguing that it has the right of first refusal based on the terms of their contract. The NNPC had also obtained a court order stalling the transaction.

The transaction entailed the acquisition of ExxonMobil’s offshore shallow water assets in Nigeria and was expected to boost the country’s oil production capacity which has been in decline.

Overruling the NNPC on Monday, President Muhammadu Buhari’s office put out a statement approving the transaction, basing his argument on the need to promote investments in the sector.

According to the statement, Buhari took the decision based on his power as the Minister of Petroleum.

“The president, in commitment to investment drive in light of the Petroleum Industry Act (PIA), 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,” it read.

No to the transaction

Hours later, however, the NUPRC which regulates the upstream sector stated that the transaction would not go on.

The CEO of the NUPRC, Gbenga Komolafe, argued that by the provisions of the PIA, the law that regulates the oil sector, only the NUPRC had the power to approve such a transaction.

THE AFRICA REPORT

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