While Seplat Energy Plc, a major energy company in Nigeria, has agreed to buy the shallow-water assets of ExxonMobil in the country, the crucial green light from the Nigerian National Petroleum Company Limited (NNPC) could come at a heavy cost.

Mele Kyari, the group managing director of NNPC, has said International Oil Companies (IOCs) divesting from Nigeria’s upstream sector must address issues of abandonment and decommissioning of oil assets.

Decommissioning, which is the general term for returning an oil production site to its pre-lease condition at the end of the useful life of the oil asset, can be a costly exercise for the companies involved. Many fields abandoned in Nigeria are not decommissioned largely because the local companies who acquire them don’t have the required funds to do so.

“We will not end the 2012 situation in Nigeria; it will be done in a manner that brings value to Nigeria,” said Kyari at a panel session during the Nigerian International Energy Summit in Abuja on Tuesday.

He had said on Monday that to sustain a prosperous business environment for Nigeria, the national oil company would pay particular attention to abandonment and relinquishment costs, severance of operator staff, third-party contract liabilities, and competency of the buyer of any divested asset.

The completion of the Seplat/ExxonMobil deal is subject to ministerial consent and other required regulatory approvals. It is usually at this stage that such deals emerge whole or come out bleeding in every opening.

While the NNPC has not hidden its intention to snap up the assets, it has struggled to raise financing. Only last month, the NNPC and the African Export-Import Bank agreed to raise $5 billion as corporate finance to fund major investments in Nigeria’s upstream sector.

It is not clear if the NNPC has obtained this financing but there are fears its cooperation would be harder to secure.

Some analysts say that for the deal to get to this stage, NNPC may have already provided some support or laid conditions that must be met.

Ayodele Oni, energy lawyer and partner at Bloomfield Law Practice, said there are pre-emption rights for NNPC’s joint operating agreements.

These pre-emption rights usually give the NNPC the right to match the best (financial) terms for any such acquisition and acquire the said asset, according to him.

“Usually, one condition to closing such deals is a document evincing the waiver of pre-emption rights by the NNPC and other joint venture partners, if any. Thus, generally speaking, and depending on the stage they are at and whether a waiver has even been obtained from NNPC, it may be able to scuttle same,” Oni said.

According to the terms of the Joint Venture (JV) contract, the NNPC, which holds a 60 percent share in the Mobil Producing Nigeria Unlimited (MPNU) JV, has the right of first refusal in any asset sale agreement.

Some analysts have said that NNPC could throw a monkey wrench into the deal because its views would be taken seriously before the deal secures ministerial blessing.

Read also: Seplat Energy grows full-year pre-tax profit by 321.1% to N71bn

A source close to the government said it might be hard to get this blessing on account of “the issues NNPC is throwing up.”

https://businessday.ng/energy/article/seplats-bid-for-exxonmobil-assets-meets-nnpc-brick-wall/pqa

Drugnibu most likely is targeting the company, he will beg the Fulani-run government to complete the deal for himself and add Mobile to one of the numerous oil companies he is a major stakeholder in.

Now there's a surprise.....


N.orthern

N.igeria's

P.etrol

C.ompany

[img]https://media1./images/8dc11d6f3b55047b74e8161550ddc719/tenor.gif?itemid=11389761[/img]

ABC Orjiako

The Chairman and co-founder of Seplat, also joined the list of domestic businessmen eyeing assets of struggling foreign oil majors, having purchased Mobil Producing Nigeria Unlimited from Exxon Mobil this month – the deal awaits regulatory approval.

Orjiako has been involved in several controversial issues, from Malabu to a court battle with Zenith Bank and Access Bank. Amid these controversies, he is to step down from his chairmanship position.

Lmao Igbo man owning all the shallow and onshore oil well mobile once owned ... would they allow it ? I don't even care self

Oga ABC the south east gas master plan is what you should be interested in forget Nigeria they would never like u

mrvitalis:
[s]Lmao Igbo man owning all the shallow and onshore oil well mobile once owned ... would they allow it ? I don't even care self

Oga ABC the south east gas master plan is what you should be interested in forget Nigeria they would never like u[/s]

He is not buying it with your money.

Ipob e-rats everywhere.

People are busy doing business and some Ipob terrorists are busy eating themselves up.

I now agree and strongly hold the view that uchu nwelu grade.

SarkinYarki:
While Seplat Energy Plc, a major energy company in Nigeria, has agreed to buy the shallow-water assets of ExxonMobil in the country, the crucial green light from the Nigerian National Petroleum Company Limited (NNPC) could come at a heavy cost.

Mele Kyari, the group managing director of NNPC, has said International Oil Companies (IOCs) divesting from Nigeria’s upstream sector must address issues of abandonment and decommissioning of oil assets.

Decommissioning, which is the general term for returning an oil production site to its pre-lease condition at the end of the useful life of the oil asset, can be a costly exercise for the companies involved. Many fields abandoned in Nigeria are not decommissioned largely because the local companies who acquire them don’t have the required funds to do so.

“We will not end the 2012 situation in Nigeria; it will be done in a manner that brings value to Nigeria,” said Kyari at a panel session during the Nigerian International Energy Summit in Abuja on Tuesday.

He had said on Monday that to sustain a prosperous business environment for Nigeria, the national oil company would pay particular attention to abandonment and relinquishment costs, severance of operator staff, third-party contract liabilities, and competency of the buyer of any divested asset.

The completion of the Seplat/ExxonMobil deal is subject to ministerial consent and other required regulatory approvals. It is usually at this stage that such deals emerge whole or come out bleeding in every opening.

While the NNPC has not hidden its intention to snap up the assets, it has struggled to raise financing. Only last month, the NNPC and the African Export-Import Bank agreed to raise $5 billion as corporate finance to fund major investments in Nigeria’s upstream sector.

It is not clear if the NNPC has obtained this financing but there are fears its cooperation would be harder to secure.

Some analysts say that for the deal to get to this stage, NNPC may have already provided some support or laid conditions that must be met.

Ayodele Oni, energy lawyer and partner at Bloomfield Law Practice, said there are pre-emption rights for NNPC’s joint operating agreements.

These pre-emption rights usually give the NNPC the right to match the best (financial) terms for any such acquisition and acquire the said asset, according to him.

“Usually, one condition to closing such deals is a document evincing the waiver of pre-emption rights by the NNPC and other joint venture partners, if any. Thus, generally speaking, and depending on the stage they are at and whether a waiver has even been obtained from NNPC, it may be able to scuttle same,” Oni said.

According to the terms of the Joint Venture (JV) contract, the NNPC, which holds a 60 percent share in the Mobil Producing Nigeria Unlimited (MPNU) JV, has the right of first refusal in any asset sale agreement.

Some analysts have said that NNPC could throw a monkey wrench into the deal because its views would be taken seriously before the deal secures ministerial blessing.

Read also: Seplat Energy grows full-year pre-tax profit by 321.1% to N71bn

A source close to the government said it might be hard to get this blessing on account of “the issues NNPC is throwing up.”

https://businessday.ng/energy/article/seplats-bid-for-exxonmobil-assets-meets-nnpc-brick-wall/pqa

Mobil don commot teh teh. NNPC dey afraid Naija economy go collapse.

This is ridiculous

Someone met the criteria but it's NNPC that is declining his purchase of the Exxon Mobil assets

bbbbh

[[s]quote author=Karlovych post=110724133] Drugnibu most likely is targeting the company, he will beg the Fulani-run government to complete the deal for himself and add Mobile to one of the numerous oil companies he is a major stakeholder in.



[/quote][/s]

Ok

Hope this won't affect those expecting Scholarship awards from these companies?
Na our only concern be that
Peace

That is a misleading headline. The NNPC doesn't have the power to block. Only the minister for petroleum can.

BOOKWORMLUX:
Hope this won't affect those expecting Scholarship awards from these companies?
Na our only concern be that
Peace

They are leaving

mrvitalis:
Lmao Igbo man owning all the shallow and onshore oil well mobile once owned ... would they allow it ? I don't even care self

Oga ABC the south east gas master plan is what you should be interested in forget Nigeria they would never like u

That's if he will listen...

As long as na SE guy, hurdles must be high

bibat37031:
Oga ABC the south east gas master plan is what you should be interested in forget Nigeria they would never like u

Exactly

The reasons given by NNPC is sufficient for such action

m

I am sure they have not paid some of their judgement debt and they want to Japa biko let us hold them to ransom before they stop producing needed spare parts and forcing us to use their renewables.

This I just

jackcanfield:
I am sure they have not paid some of their judgement debt and they want to Japa biko let us hold them to ransom before they stop producing needed spare parts and forcing us to use their renewables.

They are owning so much and there is no commitment to pay.

Dem wan carry the debts Japa.

Do you know anyone into oil? We have suppliers for NNPC certified AGO in metric tons as well as crude & PMS.

CUMIN:
The reasons given by NNPC is sufficient for such action

They haven't actually taken any action. The headline is misleading!!

How can you be a regulator and at the same time a competitor in the same industry, that's not just right.
I totally get why the decommissioning of oil assets is very important... Still nnpc has to choice one, be a regulator or a player in oil and gas... Or it should just be split in two.