Report: Oil firms ask FG to approve IOCs’ divestment to end uncertainty

Oil majors have expressed frustration at Nigeria’s slow progress in approving asset sales in the country.

There have been delays in approving acquisitions within the oil sector.

ExxonMobil, on February 25, 2022, announced it has agreed to sell its shallow-water oil assets to Seplat Energy Plc.

However, the transaction is yet to be approved by regulatory authorities — with the Nigerian National Petroleum Company (NNPC) Limited objecting to the deal.

Also, Oando, on September 14, 2023, disclosed it had signed a deal to acquire 100 percent of Eni’s shares in Nigerian Agip Oil Company Limited (NAOC Ltd). 

However, after Oando announced the deal, NNPC, in a report on September 6, 2023, expressed legal concern, saying Eni and Oando overlooked certain terms in their joint operating agreement.

Equinor ASA is also awaiting regulatory approval to finalise the sale of its Nigerian assets.

On January 16, 2024, Shell Plc agreed to sell its Nigerian onshore oil business to a consortium of local companies for more than $1.3 billion.

Speaking on the issue during a conference in Abuja, executives of major oil firms in the country expressed disappointment at the delay, according to Bloomberg.

Osagie Okunbor, managing director of Shell Nigeria, called for the “urgent need to conclude these transactions”.

On his part, Abdulrazaq Isa, chairman of Waltersmith Petroman Oil Ltd — which is part of the Renaissance consortium acquiring Shell’s assets — said approving the deals would help restore Nigeria’s ‘flagging’ oil industry.

“This remains the most realistic and successful avenue to bolster national crude oil production by the turn of the decade,” he said.

On its part, ExxonMobil said delays in approving the sale of its assets to Seplat were causing uncertainty for the communities and contractors that rely on those operations.

Shane Harris, chief executive officer (CEO), Exxon Nigeria, said it is imperative that the transaction is concluded and that everyone involved receives clarification. 

“What’s really important is it helps resolve a significant amount of uncertainty that currently clouds thousands of people,” Harris said.

On his part, Ainojie Alex Irume, Oando executive director, said there is a need for the “reviews, consent to come quickly”.

“We do need to get on these assets and start working on them.” 

However, Gbenga Komolafe, CEO, Nigerian Upstream Petroleum Regulatory Company (NUPRC), said there is no lack of urgency on its part in approving deals.

“So let the message be taken home that the regulator is in no way trying to be a show-stopper in this respect,” Komolafe said.

The NNPC. on February 27, 2024, had said it is not hindering divestment of foreign oil companies.