NUPRC Moves To Expedite $1.3bn ExxonMobil Asset Sale To Seplat Energy Plc

Strong indications have emerged that the apex regulator of Nigeria’s upstream oil sector, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), has moved to avert any potential delay in granting consent to the sale of $1.3 billion ExxonMobil’s 40 percent stake in Mobil Producing Nigeria Unlimited’s (MPNU) assets to Seplat Energy Plc.

The transaction between ExxonMobil and Seplat Energy Plc, started over two years ago but has not yet been concluded.

NUPRC’s Chief Executive Officer, Gbenga Komolafe, had at the Africa Oil Week (AOW) in Cape Town, South Africa, hinted that: “We are very optimistic that parties to the transaction will go back, look at the position of the regulator and come back by abiding by the provisions of Nigerian laws and the right thing will be done.”

However, a source at the Ministry of Petroleum told THISDAY Saturday night that: “It is a very simple matter. When the idea to sell the assets came up, the NUPRC did not say no. It only insisted that the process stipulated in Section 14 of the 2019 Joint Operating Agreement (JOA), be followed.

 “The JOA, which governs the Joint Venture operations between the Co-Venturers, clearly stated that they reach an agreement among themselves as a condition for getting NUPRC’s consent.

“In line with the law, the commission had advised co-venturers to comply because the marriage-like kind of relationship they have cannot be dissolved without the agreement of the parties.

“So, the Co-Venturers have to get back to the regulator to speak with one voice that they have agreed to sell the assets. This is the first step. There are also other steps, including the meeting of community obligations and commitment to the environmental restoration of producing sites.

“As a regulator, NUPRC upholds the law as contained in the Petroleum Industry Act (PIA), and guidelines on assignment of interests whatsoever, including share sales. This explains why it has already put in place a robust template to guide divestment in Nigeria’s oil and gas industry.

“It is very important that all parties should respect the sanctity of law and JOA between Co-Venturers in the deal. At the moment, I know that the Co-Venturers are still in the process of resolving their commercial issues and demonstrate respect for the sanctity of JOA. When the parties have reached an agreement and get back to the regulator, I am optimistic that the NUPRC will hold a workshop to review their submission and grant consent.

“NUPRC has intuitively put in place arrangements to make it easier for investors to close deals. I am also optimistic that the Commission will grant what is often referred to as Subject-to-Clearance Consent within 30 days, provided the Co-venturers demonstrate strong commitment to meeting their obligations.”

Similarly, the National President of Oil and Gas Service Providers Association of Nigeria, Colman Obasi, said: “Already, the Engr. Komolafe-led team at the NUPRC has done so much to enable businesses in the industry. For instance, NUPRC developed regulations, giving meaning and intent to the PIA, to ensure that all bottlenecks associated with regulatory processes are eliminated or minimised, to entrench seamless upstream petroleum operations.

“The gazetted regulations include Petroleum Licensing Round Regulations 2022, Petroleum Royalty Regulations 2022, Conversion and Renewal (Licences and Lease), Nigeria Upstream Petroleum Host Communities Development Regulations 2022, Domestic Gas Delivery Obligations Regulations 2022, Nigeria Upstream Petroleum Measurement Regulations 2023, Production Curtailment and Domestic Crude supply Obligation Regulations, 2023, Frontier Basins Exploration Fund Administration Regulations, 2023, Nigeria Upstream Decommissioning and Abandonment Regulations 2023, Significant Crude Oil and Gas Discovery Regulations, 2023, Gas Flaring, Venting and Methane Emission (Prevention of Waste and Pollution) Regulations, 2023 and Nigeria Upstream Petroleum Unitisation Regulations, 2023.

“The 14 draft regulations awaiting gazetting include Upstream Petroleum Fees and Rent Regulations, Acreage Management Drilling and Production Regulations, Upstream Environmental Remediation Fund Regulations, Upstream Petroleum Safety Regulations, Upstream Petroleum Environmental Regulations, Upstream Petroleum Measurement Regulations, Advance Cargo Declaration Regulations, Draft Upstream Commercial Operations Regulations, Draft upstream Petroleum Code of Conduct & Compliance Regulations, Draft Upstream Petroleum Development Contract Administration Regulations, Draft Upstream Revocation of licences and Lease Regulations, Draft Upstream Petroleum Assignment of Interest Regulations, Draft Nigerian upstream Petroleum (Administrative Harmonisation) Regulations and Draft Amendment to the Nigerian Upstream Petroleum Host Communities Development Regulations 2022.

“The NUPRC has held many stakeholder engagements on the commission’s Draft Regulatory Framework for Energy Transition, Decarbonisation and Carbon Monetisation and incorporated the inputs arising from the engagements into the regulatory framework, which will not only govern the activities of the newly established Energy Transition and Carbon Monetisation Division of the Commission but those of the entire industry in considering Energy Transition in oil and gas field development.

“As a business enabler, the NUPRC has intentionally attracted many local and foreign investors to Nigeria’s oil and gas industry, thus culminating in Nigeria’s oil reserves rising to 37.50 billion barrels in 2024, from 36.966 billion barrels recorded on January 1, 2023, while natural gas rose to 209 trillion cubic feet on January 1, 2024, from 208.83TCF recorded over the corresponding period last year.

“The commission has taken deliberate steps to drive the decade of gas programme declared by the Federal Government through more aggressive development of the nation’s huge gas resources, enhanced exploration activities, development of utilisation schemes leading to gas reserves growth, increased gas production, maturation of domestic and export gas markets, in addition to gas flare elimination and commercialisation through the Nigeria Gas Flare Commercialisation Programme (NGFCP).”

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