Exxon Mobil: Regulator Contradicts Buhari; Rejects His Approval For Acquisition By Seplat

By Gideon Njoku

Less than 24 hours after President Muhammadu Buhari approved and signed the acquisition of Exxon Mobil shares in the United States of America by Seplat Energy Offshore Ltd, an obstacle has been thrown at the approval.

Nigeria’s Upstream Petroleum Regulator has disagreed with the President, and rejected his approval.

Earlier on Monday, a statement signed by the President’s Special Adviser on Media and Publicity, Femi Adesina, had said that Buhari gave the approval in his capacity as the Minister for Petroleum Resources.

Adesina: “In his capacity as Minister of Petroleum Resources, and in consonance with the country’s drive for Foreign Direct Investment 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.”

But in a statement later Monday, which clearly shows a division,  the Nigerian Upstream Petroleum Commission, NUPRC, contradicted the President. It said nothing has changed from its earlier stand rejecting the acquisition by Seplat Energy Offshore Limited.

In the statement signed by its Chief Executive Officer, Gbenga Komolafe, NUPRC said: “The Nigerian Upstream Regulatory Commission affirms that the status quo remains in respect of Exxon Mobil/Seplat Energy share acquisition.”

Adesina’s statement on the approval by Buhari read:

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

“Exxon Mobil/Seplat are expected to carry out operatorship of all the oil mining licenses in the related shallow water assets towards production optimization to support Nigeria’s OPEC quota in the short term as well as ensure accelerated development and monetization of the gas resources in the assets for the Nigerian economy.

“President Buhari also directed that all environmental and abandonment liabilities be adequately mitigated by Exxon Mobil and Seplat.”

But NUPRC says President Buhari has no such powers to approve the deal. Komolafe said only the Commission can approve of such deals in line with the provisions of the Petroleum Industry Act 2021.

Komolafe: “As it were, the issue at stake is purely a Regulatory matter and the Commission had earlier communicated the decline of Ministerial assent to Exxon Mobil in this regard. As such, the Commission further affirms that the status quo remains.”

Before the approval by President Buhari, the transaction had ran into troubled waters when  the Government-owned Nigeria National Petroleum Corporation Limited said it has the right of first refusal.

The question now is who blinks first – President Buhari or NUPRC – in the transaction which has been controversial from day one, and had been a subject of law suits?