The conflicting info from varied parastatals of the Nigerian authorities over the $1.3bn deal between Seplat Power Plc, a significant power firm, and US-based ExxonMobil is creating uncertainty within the nation’s oil and gasoline sector, BusinessDay’s findings have proven.
Business stakeholders and watchers mentioned the saga may restrict the flexibility of the sector to draw contemporary investments.
“International buyers all the time require an exit possibility. When this seems muddied, it’s one other headwind for brand new buyers to think about,” Tosin Shobo, managing director of Rising Markets Power Assets Ltd, mentioned.
“Essentially the most enticing oil and gasoline basins have nice deal move but when it takes three years to exit, this can be a vital draw back to funding,” he added.
Seun Onigbide, the co-founder and CEO of BudgIT, a Nigerian civic tech organisation, questioned the place of the Petroleum Business Act (PIA) on belongings gross sales and divestment in Nigeria’s oil and gasoline sector.
“It’s not acceptable within the Petroleum Business Act for the minister to speak on to an operator; each communication goes via the regulator. On this, the press launch from the president wasn’t alleged to occur. You continue to need to undergo NUPRC to approve Seplat’s request, besides your phrases now not carry weight,” Onigbide mentioned.
Findings by BusinessDay confirmed Part 95 subsection 10 of the PIA states that “the place the appliance for an task or a switch of a petroleum prospecting licence or petroleum mining lease is refused, the fee shall inform the applicant of the explanations for the refusal and should give affordable time inside which additional representations could also be made by the applicant or by third events in respect of the appliance”.
Part 95, subsection 15 additionally states that “a holder of a petroleum exploration licence shall not assign, novate or switch his licence or any proper, energy or curiosity with out the prior written consent of the fee”.
Analysts say public spat amongst regulators might additional expose the sorry state of Nigeria’s oil sector, the primary revenue-earner of the nation, and worsen the expansion prospects of an financial system nonetheless smarting from the fallout of a recession and COVID-19 pandemic.
On Monday, three press releases had gone out to the media in regards to the Seplat/ExxonMobil deal, two of them declaring that ministerial consent had been granted and one clearly saying ‘no’ with some ambiguity.
The primary assertion is an announcement from the Presidency saying that President Muhammadu Buhari had “consented to the acquisition of Menu ExxonMobil shares in the US of America by Seplat Power Offshore Restricted”.
Seplat Power’s exterior affairs directorate corroborated the Presidency assertion, saying it had acquired “a letter from the Honourable Minister of State for Petroleum Assets notifying Seplat Power that His Excellency, President Muhammadu Buhari has graciously authorised that ministerial consent be granted to Seplat Power Offshore Restricted’s money acquisition of the complete share capital of Mobil Producing Nigeria Limitless”.
However hours after, the Nigerian Upstream Petroleum Regulatory Fee (NUPRC) despatched out an announcement that contradicted these from the Presidency and the Minister of State however left open doubts as to the conclusion of the transaction.
Learn additionally: Seplat-ExxonMobil saga sends hazard alerts to grease buyers
NUPRC mentioned the matter was a regulatory one and nothing had modified after it had earlier notified ExxonMobil the transaction had been declined.
“The Nigerian Upstream Petroleum Regulatory Fee (NUPRC) affirms that the established order stays in respect of ExxonMobil/Seplat Power share acquisition,” mentioned an announcement by NUPRC’s chief govt, Gbenga Komolafe.
Seplat had supplied over $1.2 billion to buy MPNU, a subsidiary of ExxonMobil. In a bid to cease the deal, NNPC went to court docket on July 5 to get a restraining order towards the switch or sale to Seplat.
ExxonMobil had introduced in February that it had reached an settlement to promote its fairness curiosity in Mobil Producing Nigeria Limitless to Seplat Power via its wholly-owned subsidiary Seplat Power Offshore Restricted.
The power large mentioned when finalised, the newest sale would come with the Mobil Growth Nigeria and Mobil Exploration Nigeria fairness possession of Mobil Producing Nigeria Limitless, which holds a 40 per cent stake in 4 oil mining licenses, together with greater than 90 shallow-water and onshore platforms and 300 producing wells.
“Regulatory conflicts are a disincentive to grease and gasoline funding as a result of it hampers the way forward for enterprise operations,” Luqman Agboola, head of power and infrastructure at Sofidam Capital, mentioned.