Nigerian regulator approves four major oil divestments, rejects one

The Nigerian government has approved four major oil divestments including the sale of ExxonMobil onshore assets to Seplat Energy, more than two years after the deal was first secured. The regulator, however, rejected one for failing “regulatory tests.”

The Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, disclosed these while speaking at the launch of the project one million barrels of oil per day (mmbpd) initiative in Abuja on Monday.

In February 2022, Seplat announced it had closed a deal with ExxonMobil to fully purchase its 40 per cent interest in a shallow-water joint venture with the Nigerian National Petroleum Company Limited (NNPC Ltd).

Worth $1.3 billion, the acquisition was originally planned to be consummated by mid-2022 but has been slowed by delays.

A similar sale of onshore fields by Eni to Oando was approved in July while a planned sale of onshore shallow water operations by Shell to Renaissance Africa Energy Company Limited was rejected.

On Monday, Mr Komolafe explained that out of the total of five divestment applications for consent received by the commission, four (representing 80 per cent) passed the regulatory test and secured ministerial consent.

“The transactions are: Mobil Producing Nigeria Unlimited (MPNU) to Seplat Energy Offshore Limited, Equinor Nigeria Energy Company Limited to Project Odinmin Investments Limited, Nigerian Agip Oil Company Limited to Oando Petroleum and Natural Gas Company Limited and TotalEnergies EP Nigeria Limited to Telema Energies Nigeria Limited.

“However, the divestment of Shell Petroleum Development Company Limited’s assets to Renaissance Africa Energy Company Limited could not scale regulatory test,” Mr Komolafe said.

He said divestment is an acknowledged practice and within the right of investors in business decisions globally.

“In recognition of this, as a nation, Nigeria is fully committed to the philosophy of free entry and free exit as further reiterated by our dear President, His Excellency, Bola Ahmed Tinubu, in his 1st October 2024, speech.

“The NUPRC in operationalising this principle, developed seven regulatory pillars to guide divestment in the upstream oil sector for sanity and protection of national interest.

“We are happy today to announce the status of divestment exercise conducted diligently by the commission in line with the provisions of the Petroleum Industry Act (PIA),” he said.

The approved deal does not, however, mean that ExxonMobil is exiting Nigeria.

Last September the Nigerian government said ExxonMobil has proposed a $10 billion investment in Nigeria’s deep-water oil operation.