NNPC Limited has disclosed that Nigerian Agip Oil Company (NAOC) did not obtain its consent before announcing a deal to sell onshore oil assets to Oando PLC.
Nairametrics reported that Oando Plc had entered an agreement with ENI for the acquisition of 100% of the shares of Nigerian Agip Oil Company Limited (NAOC Ltd). The completion of the acquisition was subject to Ministerial Consent and other required regulatory approvals.
According to Reuters the concerns raised by NNPC cast doubt on the speed of the transaction highlighting the difficulties international oil companies have been facing while trying to sell their Nigeria onshore oil and gas assets.
What NNPC is saying
In a letter signed by the MD of NNPC E&P Limited, Ali Muhammed Zarah, NNPC says that the sale of Agip assets to Oando without their consent is a breach of its Joint Operating Agreement it signed on July 1991 relating to NAOC/NEPL/OOL Joint Venture.
Commenting on the letter, NNPC spokesperson Garba Deen Muhammad said the letter did not indicate an objection to the transaction.
- “NEPL is only drawing attention to certain important clauses in the JOA, which might have been overlooked in error. Adherence to those clauses will protect the transaction now and in the future.”
It is important to note that NNPC Exploration and Production Limited (NEPL) holds a 60% stake in a NAOC joint venture.
Agip’s response
According to Reuters, ENI (parent company of NAOC) said there had been no breach of the joint venture contract.
- “NNPC has a pre-emption right on the JV shares, but Eni doesn’t have any contractual obligation to inform beforehand NNPC about the deal, also because the information was price sensitive for the potential buyer,” it said.
The Italian oil giant noted that procedures and other consents will be “duly and carefully followed” at the applicable time.
Back Story
Oando Plc a leading indigenous energy solutions provider had entered an agreement with ENI for the acquisition of 100% of the shares of Nigerian Agip Oil Company Limited (NAOC Ltd).
The completion of the acquisition is subject to Ministerial Consent and other required regulatory approvals.
Commenting on the acquisition, the Group CEO of Oando Plc, Wale Tinubu CON said the deal would help unlock more opportunities for the energy company.
Wale Tinubu also indicated that the acquisition highlights the important role indigenous companies will play in the future of the Nigerian upstream sector.
