Seplat/ExxonMobil Deal: Rejection Based On PIA Provisions – NUPRC

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has maintained that its decision that status-quo remains in respect to the ExxonMobil/Seplat Energy share acquisition deal is based on the provisions of the Petroleum Industry Act (PIA) 2021.

Recall that NUPRC, in a counter statement to President Mohammadu Buhari’s approval of Seplat’s purchase of ExxonMobil’s asset, on Monday had insisted it was standing firm on its position not to approve the acquisition.

A statement repudiating the presidential statement, late on Monday, several hours after presidential spokesperson Femi Adesina had said in a statement President Buhari had approved the sale to Seplat, an indigenous oil company.

NUPRC in a statement signed by its chief executive Gbenga Komolafe contradicted the earlier statement by the Presidency announcing President Muhammadu Buhari’s approval of Seplat Energy’s acquisition of Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation.

The Commission said yesterday the matter was a regulatory one and nothing had changed after it had earlier notified ExxonMobil the transaction had been declined.
“The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) affirms that status quo remains in respect of ExxonMobil/Seplat Energy share acquisition,” said a statement by NUPRC chief executive, Gbenga Komolafe.
“Responding to media enquiries on latest development about the transaction, the Chief Executive of the NUPRC Gbenga Komolafe clarified that the Commission in line with the provisions of the Petroleum Industry Act 2021 is the sole regulator in dealing with such matters in the Nigerian upstream sector.
“As it were, the issue at stake is purely a regulatory matter and the Commission had earlier communicated the decline of Ministerial assent to ExxonMobil in this regard. As such the Commission further affirms that the status quo remains.”
Shedding more light on the transaction, Komolafe clarified that the Commission in line with the provisions of the PIA 2021, remains the sole regulator in dealing with such matters in the Nigerian upstream sector.

He said as it were, the issue at stake is purely a regulatory matter and the Commission had earlier communicated the decline of Ministerial assent to ExxonMobil in this regard. As such the Commission further affirms that the status quo remains.

Quoting relevant sections of the law which empowers it to hold such view, Komolafe stated that the status quo (its withdrawal of consent) still holds.

“Let me just put it simply, as a commission, we work strictly in line with the position of the law, and basically we don’t react on the basis of news making the rounds, but we work strictly in line with the law.
“And by virtue of the provisions of the petroleum industry act, under section 95, subsection 10, 14 and 15, the commission’s powers in these regards are clearly stated.
So, regarding the issue you have raised, my clarification will just be an affirmation that the position of the commission stands in respect of the decline of the assets (sale), without prejudice to any other position.
“So, the position of the commission as the authority involved in the regulation of the upstream which had earlier been communicated to Mobil, stands. As far as the commission is concerned, nothing has changed. The status quo remains as far as we are concerned,” he maintained
Checks on the sections highlighted by Komolafe indicated that Section 95, sub-section 10 states, “Where the application for an assignment or a transfer of a petroleum prospecting licence of petroleum mining lease is refused, the commission shall inform the applicant of the reasons for the refusal and may give reasonable time within which further representations may be made by the applicant or by third parties in respect of the application.”
In sub-section 14 of same section 95, the PIA states that: “For the purpose of this section, change of control means any person or persons acting jointly or in concert, to acquire direct or indirect beneficial ownership of a percentage of the voting power of the outstanding voting securities of the holder, by contract or otherwise, that exceeds 50 per cent at any time.”
Sub-section 15 states thus: “A holder of a petroleum exploration licence shall not assign, novate or transfer his licence or any right, power or interest without prior written consent of the commission.