…as president reverses decision
Timipre Sylva, minister of state for Petroleum, may have influenced President Muhammadu Buhari to approve the controversial sale of ExxonMobil shares to Seplat Energy, a decision that has now been reversed by the president.
Presidential sources disclosed that Sylva had encouraged Buhari to sign the deal, which Seplat Energy Plc had first announced in February, a development that surprised industry players and quickly prompted counter reactions.
Recall that on Monday, President Buhari approved the acquisition of ExxonMobil Corporation’s assets by Seplat Energy Plc despite moves by the Nigerian National Petroleum Company (NNPC) Limited blocking the deal.
The deal entails an agreement to acquire the entire share capital of Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation, Delaware, in other words, ExxonMobil Nigeria’s entire offshore shallow water business, for $1.28bn.
According to the deal, ExxonMobil Nigeria’s shallow water business is an established, high-quality operation with a highly skilled local operating team and a track record of safe operations.
Coming in the wake of growing divestment from Nigeria by oil majors, the deal represented yet another significant setback to the country’s oil sector, given that local players largely lack the capacity to step into the gap, which may have warranted the intervention from the state owned oil company.
The NNPC which opposed the deal citing overriding national interest, it would be recalled, last month won a court decision temporarily blocking Exxon from selling assets in Nigeria to Seplat.
A judge in Abuja had granted NNPC an “order of interim injunction” on July 6, 2022, barring Exxon Mobil “from completing any divestment” in a unit that ultimately operates four licenses in Nigeria.
However, despite the extant injunction, Seplat on Monday, announced that it had received a letter from Sylva, the minister of state for Petroleum Resources notifying it that President Buhari had approved that ministerial consent be granted to Seplat Energy Offshore Limited (a Seplat Energy subsidiary)’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 (“ExxonMobil”).
Seplat also stated that the approval was given by President Buhari in his capacity as the minister of Petroleum Resources, and 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, separate announcement from the State House was released earlier.
It added that in the letter, the president directed that the HMSPR to 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.
But in a twist of events, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), which had previously declined to consent to the proposed acquisition deal, said the issue at stake was a regulatory matter, adding that status quo would remain on the issue.
The NUPRC in a statement later on Monday, said that the status quo remained in respect of the ExxonMobil/Seplat Energy share acquisition.
The agency, in the statement signed by its chief executive, Gbenga Komolafe, said that “the commission (NURPC) 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.
The statement added, “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 a predictable and conducive regulatory environment at all times in the Nigerian upstream sector.”
Having discovered lapses in the deal and angered by the Sylva’s action, President Buhari on Wednesday, reversed his approval of the deal.
Garba Shehu, presidential spokesman who communicated the reversal, said the president has taken a decision that the position of the Nigerian Upstream Petroleum Regulatory Commission be supported.
He said the earlier confusion was because “various agencies involved in (the) decision had not coordinated well among themselves.
“It has become clear that the various agencies involved in the decision had not coordinated well among themselves and having looked at all of the facts with all of the ramifications, the president decided the position of the regulator is to be supported.”
Sources within the Presidency had told this newspaper that there are extant laws governing such transactions, arguing that this statutory mandate lies within the purview of the Nigeria Upstream Petroleum Regulatory Commission.
One of the Presidency sources with knowledge of the transaction had told this website that the president had on July 5 issued a directive to the NNPC Limited to proceed with the acquisition of 40 per cent interest of ExxonMobil.
The source who said the approval by President Buhari still subsists, argued that that the president cannot suddenly reverse himself for a transaction of such magnitude.
Horatius Egua, senior special adviser on Media and Communication to the petroleum minister, speaking, said the minister is yet to receive any communication of the president’s reversal of the oil deal, stressing that the president couldn’t have been deceived because he is intelligent enough to either consent or decline on national issues.
Source: THE WITNESS
