NUPRC Announces Completion of Acquisition of Oando, Nigeria Agip Oil Company

The Nigerian Petroleum Regulatory Commission (NUPRC) announced that Oando PLC has completed the acquisition of 100% stake in Nigerian Agip Oil Company Limited (NAOC Ltd).

NUPRC Chief Executive Officer, Engineer Gbenga Komolafe, on Wednesday disclosed that Oando Plc, a leading provider of indigenous energy solutions, has finalized an agreement with ENI to acquire 100% of the shares of Nigerian Agip Oil Company Limited (NAOC Ltd).

He disclosed this during the ongoing Oil and Gas Energy Week in Abuja, sponsored by the Nigerian National Petroleum Company (NNPC) Limited and other companies, which was attended by a Nairametrics analyst.

The NUPRC chief also gave an update on acquisitions involving three other major Nigerian oil companies.

Acquisition Status

According to him, the NAOC – Oando agreement has been finalized and the signing ceremony is expected to take place in the coming days.

He added that the agreement between Equinor and the Odinmim Project has already been finalized and the signing ceremony will take place in the coming days.

He added that regarding the Shell Petroleum Development Company of Nigeria Limited (SPDC) deal with Renaissance Consortium, SPDC has submitted documents and is “undergoing due diligence”.

In relation to Seplat’s proposed takeover of ExxonMobil Nigeria’s shallow-water operations, he revealed that “the company (Seplat) has expressed its commitment to seek ministerial approval for NUPRC.”

NUPRC is one of the regulatory agencies for oil and gas sector entities.

Delay in sales activities

Responding to the need to expedite the completion of the ongoing asset sales in Nigeria, Komolafe stressed that the NUPRC recognises that asset sales are within the rights and competences of investors in light of the free entry and exit principles.

However, he added that it is the job of a regulator like NUPRC to ensure that asset divestments are carried out in accordance with the law and best practices.

He explained that countries like Brazil, Canada and the UK have had very bad experiences with asset divestment.

“There has been a sell-off of assets in these different jurisdictions, but the experience of individual countries has been insufficient and as a country and a regulator we do not want the same to happen to our nation.

“While we recognise the right of investors to divest assets, the regulator maintains that this is done within the rule of law and that is exactly what we do at NUPRC,” he said.

He revealed the hurdles investors have to overcome to obtain the necessary approvals in Nigeria.

What did he say,

“The national interest must be safeguarded and in this regard we need to make the industry understand that the regulator has proactively implemented a sell-off framework which has been the basis for the ongoing sell-off and which we have institutionalised.

“The goal is for the seller to ensure that the buyer can demonstrate financial capacity, technical capability and freedom from legal encumbrances. Decommissioning and abandonment issues will be well-placed so that the nation does not have to bear an unintended burden.

“The issue of host communities and the environmental fund is well resolved, and of course industrial and labour relations are well regulated, as is the repatriation of data,” he listed.

More observations

Oando announced its planned acquisition of Agip from ENI, subject to ministerial and other required regulatory approvals.

Eni also confirmed the signing of an agreement with Oando PLC – a leading Nigerian provider of indigenous energy solutions, listed on the Nigerian Stock Exchange and the Johannesburg Stock Exchange – for the sale of Nigerian Agip Oil Company Ltd (NAOC Ltd), a wholly owned subsidiary of Eni that focuses on onshore oil and gas exploitation and production in Nigeria, as well as power generation.

ENI, however, indicated that it would continue to have a presence in Nigeria through Nigeria Agip Exploration (NAE) and Agip Energy.

It was also reported that the transaction is in line with the company’s 2023-2026 plan.

History

Nairametrics It was previously reported that the transaction would also increase Oando’s current stake in OML 60, 61, 62 and 63 from 20% to 40%

A few months ago, Project Odinmin Investments Limited (the Acquiror or POIL) announced a proposal to acquire 100% of the issued shares of Equinor Nigeria Energy Company Limited (the Target) from the current shareholder of the Target, Equinor Nigeria AS (the Seller) (the Proposed Merger).

SPDC recently explained to a Nigerian court that the sale of over $1.3 billion of onshore oil assets to Renaissance Consortium was a stock transaction, adding that the company’s Nigerian assets were unaffected.

The Nigerian National Petroleum Company Limited (NNPC) has filed an application to drop legal proceedings against several of its subsidiaries, Mobil Nigeria and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

The application filed on June 11, 2024 in the High Court of the Capital Territory in Abuja was part of a broader effort to finalize a settlement agreement for the divestment of 100% of the shares in Mobil Producing Nigeria Unlimited (MPNU) to Seplat Energy Offshore Limited.

NUPRC has established an Asset Sale Framework to oversee the assessment of applications for ministerial approval in relation to the asset sale process for Shell Petroleum Development Company of Nigeria Ltd (SPDC) and others.

Transactions between the two companies were dragged on for some time due to legal requirements they had to meet in Nigeria.