Business

NUPRC Stands Firm on Mobil-Seplat No Deal, Insists Status Quo Remains

Published

2 years ago

August 9, 2022

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) on Monday affirmed that the status quo remains with respect to the ExxonMobil/Seplat Energy share acquisition.

The clarification by the NUPRC Chief ExeAcutive, Mr. Gbenga Komolafe, followed an earlier statement same day that President Muhammadu Buhari had approved the acquisition which effectively nullified the long-drawn attempt by the Nigerian National Petroleum Company Limited (NNPC) to block the $1.283 billion sale and purchase transaction between SeplatEnergies and Mobil Producing Nigeria Unlimited (MPNU).

However, several attempts to get presidency’s reaction to the counter statement by the NUPRC saying its withdrawal of consent stays, proved abortive as the Media Adviser, to the President, Femi Adesina did not answer THISDAY calls to his phone.

But the law as it stands today gives the regulator powers over such transactions. Clearly, the old Petroleum Act gave powers of conscent and approvals to the Minister of Petroleum. However, the new law, which is the PIA, vests such powers in the Regulatory Commission. And Buhari is standing with the law.

Analysts are of the view that the NUPRC is merely upholding the law and anything short of it would amount to business as usual.

The Regulatory Commission (NUPRC) had in reaction to the statement by Femi Adesina conveying the Ministerial approval of the deal affirmed that status quo remains in respect of ExxonMobil/Seplat Energy share acquisition,

Responding to media enquiries on the latest development about the transaction, Komolafe clarified that the Commission in line with the provisions of the Petroleum Industry Act (PIA) 2021, remains 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 boss stated.

Shedding more light on the matter, when contacted Monday night by THISDAY, Komolafe reiterated that the position of the PIA was clear on the matter.

Quoting relevant sections of the law which empowers it to hold such view, Komolafe stated that the status quo (its withdrawal of consent) still holds.

“Let me just put it simply, as a commission, we work strictly in line with the position of the law, and basically we don’t react on the basis of news making the rounds, but we work strictly in line with the law.

“And by virtue of the provisions of the petroleum industry act, under section 95, subsection 10, 14 and 15, the commission’s powers in these regards are clearly stated.

“So, regarding the issue you have raised, my clarification will just be an affirmation that the position of the commission stands in respect of the decline of the assets (sale), without prejudice to any other position.

“So, the position of the commission as the authority involved in the regulation of the upstream which had earlier been communicated to Mobil, stands. As far as the commission is concerned, nothing has changed. The status quo remains as far as we are concerned,” he maintained.

Checks on the sections highlighted by Komolafe indicated that Section 95, sub-section 10 states, “Where the application for an assignment or a transfer of a petroleum prospecting licence of petroleum mining lease is refused, the commission shall inform the applicant of the reasons for the refusal and may give reasonable time within which further representations may be made by the applicant or by third parties in respect of the application.”

In sub-section 14 of same section 95, the PIA states that: “For the purpose of this section, change of control means any person or persons acting jointly or in concert, to acquire direct or indirect beneficial ownership of a percentage of the voting power of the outstanding voting securities of the holder, by contract or otherwise, that exceeds 50 per cent at any time.”

It continued in sub-section 15 thus: “A holder of a petroleum exploration licence shall not assign, novate or transfer his licence or any right, power or interest without prior written consent of the commission.”

Also, Section 95, sub-section 8 states: “Where the consent of the minister is granted in respect of the application for a transfer, the Commission shall promptly record the transfer in the appropriate register.”

Sub-section 9: “The Commission shall communicate the refusal or approval of an application for an assignment, novation or transfer of a licence or lease in writing to the applicant.”

Earlier, Buhari, who is Minister of Petroleum Resources had intervened in the matter, which had grabbed the headlines in recent months, highlighting his commitment to driving Foreign Direct Investment (FDI) in the oil and gas sector.

Earlier in the year, THISDAY had exclusively reported that SeplatEnergies, an indigenous oil company, was in the process of acquiring the entire offshore shallow water business of ExxonMobil in Nigeria.

Seplat Energy Offshore Limited, a subsidiary of Seplat Plc, had entered into the Sale and Purchase Agreement to acquire the entire assets for $1.283 billion plus up to $300 million contingent consideration.

According to the sponsors, the deal was supposed to create one of the largest independent energy companies on both the Nigerian and London Stock Exchanges, and bolster SeplatEnergy’s ability to drive increased growth.

But no sooner had the process been announced than the state-owned national oil firm moved to halt it from proceeding. The NNPC had claimed that it had a pre-emption right, before the Nigerian authorities put a stop to it, citing overriding national interest as one of the reasons for rejecting the deal.

“We regret to inform you that His Excellency, the Minister of Petroleum Resources, has declined his consent to the transaction,” a letter written by the NUPRC had stated thereafter.

The transaction encompassed the acquisition of the entire offshore shallow water business of ExxonMobil in Nigeria and was expected to deliver 186 per cent increase in production from 51,000 bpd to 146,000 bpd or 170 per cent increase in 2P liquids reserves, from 241 MMbbl to 650 MMbbl.

In addition, it was expected to deliver a 14 per cent increase in 2P gas reserves, from 1,501 Bscf to 1,712 Bscf, plus significant undeveloped gas potential of 2,910 Bscf (JV: 7,275 Bscf)

Furthermore, it would increase by 89 per cent the total 2P reserves, from 499 MMboe to 945 MMboe, including offshore fields with dedicated, MPNU-operated export routes offering enhanced security and reliability.

But the president, who before Monday’s statement by the NUPRC, had okayed the deal in a statement issued by Adesina.

According to the statement, Buhari took the decision in his capacity as Minister of Petroleum Resources, and in consonance with the country’s drive for increased FDI in the energy sector.

The president recalled that ExxonMobil had entered into the 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.

The statement said, “In his capacity as Minister of Petroleum Resources, and in consonance with the country’s drive for Foreign Direct Investment (FDI) 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.

“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.

“Considering the extensive benefits of the transaction to the Nigerian energy sector and the larger economy, President Buhari has given ministerial consent to the deal.

“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 added that Exxon Mobil/Seplat were expected to carry out operatorship of all the oil mining licenses in the related shallow water assets towards production optimisation to support Nigeria’s Organisation of Petroleum Exporting Countries (OPEC) quota in the short term.

Furthermore, the statement noted that Buhari’s intervention was to ensure accelerated development and monetisation of the gas resources in the assets for the Nigerian economy.

Buhari also directed that all environmental and abandonment liabilities be adequately mitigated by Exxon Mobil and Seplat in the course of the implementing the agreement.

Last month, leaked court documents indicated that the national oil company had approached an Abuja court, which granted it an “order of interim injunction” on July 6 barring Exxon “from completing any divestment” in the unit.

Related Topics:Accessnews Accessnewsmag Accessnewsng OilandGas

Up Next

Donald Trump accuses FBI of raiding his Mar-a-Lago estate

Don't Miss

Suicide bomber kills Pakistani soldiers after Taliban leader’s death

Derrick Bangura

Click to comment

Business

Businesses count losses amid power outage in Bauchi, Gombe, and Jigawa

Published

3 weeks ago

October 28, 2024

Matthew Eloyi

Business owners in Bauchi, Gombe and Jigawa are recording losses due to week-long blackout ocassioned by vandalism of the power transmission line in parts of northern Nigeria.

The sudden disruption in electricity supply in the past days, also affected essential services such as water, sanitation, street lighting and healthcare delivery as most hospitals have been operating without light.

Some of the affected businesses including shop keepers, millers and artisans, who spoke while reacting to a survey by the News Agency of Nigeria (NAN), described the situation as “pathetic”.

The survey examined the perennial collapse of national grid and the need for alternative power supply in the country.

Rice millers in Gombe had decried the impact of the erratic power supply on their businesses.

A Miller, Musa Arab, at Nassarawo Industrial Layout in Gombe, said the trend was crippling their operations as they relied on electricity supply from the grid to process paddy.

He said the mills were not operational power outage as they could not afford exorbitant pump prices of petrol or diesel to run their machines.

This, he said, reduced the volume of rice supply to the market and posed serious challenge to food security.

“We must invest in power because it is the biggest determining factor for industries to thrive.

“I have over 20 workers in my mill, and we have 100 mini rice mills here, so you can imagine those who have no jobs for the past 10 days.

“Government must go tough on those responsible for the perennial grid collapse because some persons may be benefitting from it,” he said.

Also, Yusuf Ibrahim said the situation might trigger the already fragile inflation, as prices of local varieties would shot up ocassioned by the diminish supply.

He said that some had jerked up their charges to cover the expenses on diesel thereby affecting rice prices.

A check by NAN at the Gombe Main market showed that a 100 kilogramme of rice was sold for between N120,000 and N160,000, as against N110,000 and N150,000, before the blackout.

Mr Usman Sani, a rice dealer, attributed the hike in price to low supply of the produce to the market in spite of the number harvest recorded this cropping season.

He said the prices had decreased slightly at the onset of the harvest, however, it showed sprawling increase due to power outage.

“The price of rice is already dropping as a result of harvest but the trend reverse since the blackout in the past days “ he said.

Ugochukwu Daniel, a bartender in Bauchi, decried the epileptic power supply in the country, adding that lack of durable energy supply would retard Nigeria’s quest to attain social and economic greatness.

Daniel said that she spent much on fuel to run power generator for refrigrator and lightening the beer parlour, to enable her to keep the business running.

He said that businesses could only thrive in an enabling environment with stable electricity supply, to enhance wealth creation and reduce poverty among Nigerians.

“My trade is about chill drinks and it survives on electricity to operate otherwise you will out of bussiness.

“Without electricity there is nothing you can do, and not only business but about everything. We depend on it,” he said.

Similarly, Samuel Adamu, said the persistent power outage had forced him to patronised charcoal for ironing clothes in spite of its high cost and cumbersome processes.

He said that most cleaners in the area had resorted to fabricated iron charcoal in spite of hike in its prices which suddenly jumped from N5,000 to N15,000.

Adamu said the situation also encouraged division of labour in laundry to cut cost and make some gains.

“Presently, I do wash the cloth, and engage someone for ironing. The charge is N300 per set as against N150”.

While advocated development of renewable energies to enhance power supply in the country, Adamu urged security agencies to entensify efforts towards electrical installations in the country.

In the same vein; Mr Muhammad Adamu, Chairman, Jigawa State House Assembly Commitee on Power and Energy, said the Jigawa Electricity Law 2024, made sound provisions to improve power generation and distribution in the state.

This, he said, was an offshoot of the devaluation brought about by the 5th alteration of the constitution, where removed power from the executive legislative list and to the concurrent list.

“It empowered the state houses of assembly to enact laws on power.

“The committee has also carefully pursued the bill and reviewed its structure and the promise it holds for the state power sector, infrastructure and the overall economy of the state.

“The new law will pave way for the establishment of Jigawa Electricity Commission, to regulate the state’s electricity market,” he said.

According to Adamu, the law will protect residents and investors in the energy sector through ensuring prepaid meter installation and possibility of recouping investor’s funds as well as address vandalism.

“The law will lead to provision of reliable, affordable and sustainable power, essential for development of all sectors of the economy, particularly in rural areas,” Adamu said.

“Vandalism will be over because we pay Kano Electricity Distribution Company (KEDCO) money for powered supplies, but whenever there is problem of damages or broken down transformers, it is either the communities or individuals that pay for the repairs”.

Business

Mercedes urges delay of EU tariffs on Chinese electric vehicles

Published

1 month ago

October 21, 2024

Matthew Eloyi

Mercedes urges delay of EU tariffs on Chinese electric vehicles

The head of German luxury carmaker Mercedes-Benz, has called for the European Union to de-escalate the dispute with China over tariffs on electric cars.

“We need more free trade instead of new trade barriers.

“That is why it is important to find a solution that suits both the EU and China,” chief executive Ola Källenius told the Monday edition of Bild newspaper.

“The negotiations for this take time. In order not to jeopardise them, the EU should postpone the enforcement of the planned tariffs,’’ he said.

At the start of the month, a majority of EU countries paved the way for additional tariffs of up to 35.3 per cent on battery-powered electric vehicles imported from China.

Germany, however, voted against the measure amid concerns over retaliatory actions which could hurt the country’s giant car industry.

The European Commission had pressed for extra tariffs after an investigation accused Beijing of subsidising domestic electric car manufacturers, and thus distorting the market in the EU.

But whether the import tariffs would actually come into force at the beginning of November is still up to the commission.

The plans can still be dismissed if Brussels reaches a solution with China at the negotiating table.

Business

ACCI moves to promote business connections, balance work-life

Published

1 month ago

October 16, 2024

Matthew Eloyi

ACCI moves to promote business connections, balance work-life

The Abuja Chamber of Commerce and Industry (ACCI), is taking innovative steps to enhance professional relationships and promote a healthy work-life balance.

The President of ACCI, Dr Emeka Obegolu, said this in a statement on Tuesday in Abuja.

Obegolu said ACCI was committed to creating environments where professionals could connect beyond the confines of traditional boardrooms.

He said the upcoming “Business Meets Golf’’ Tournament epitomises this vision.

“Scheduled for Oct. 18 to Oct 19 at the IBB Golf Club, the tournament will gather industry leaders, top executives, and key decision-makers for a unique networking experience.

“This two-day event aims not only to strengthen business ties but also to foster partnerships that can drive economic growth.

“The ACCI’s initiative reistates the importance of maintaining a balance between professional achievement and personal well-being.

“By encouraging corporate cultures that prioritise relaxation and self-care, the Chamber acknowledges that such balance is vital for productivity and overall success,” he said.

According to Obegolu, the event will feature a range of activities designed to facilitate both business engagement and relaxation.

“Highlights include a Business-to-Business (B2B) cocktail on the first day, followed by the golf tournament and additional networking opportunities on the second day.

“The tournament will culminate in an awards ceremony recognising outstanding golfers among the participants.

“‘Business Meets Golf’ exemplifies our dedication to fostering innovative networking opportunities.

“We aim to create spaces for meaningful discussions that can lead to impactful collaborations,” Obegolu said.

The ACCI boss said in addition to promoting business connectivity, the council aimed to restate the importance of relaxation and a balanced lifestyle.

Obegolu said through events like this, the Chamber continued to play a pivotal role in supporting trade and industry in Nigeria while driving sustainable growth within the private sector.

He said to raise awareness about this landmark event, ACCI was partnering with the News Agency of Nigeria (NAN) and Media Trust Limited, to ensure broad visibility and engagement from leading brands.