FG’s Rejection Of Seplat, Mobil Deal Indicates New Investors Are Not Wanted –stakeholders

Stakeholders in the oil and gas industry have said that Federal Government’s refusal to give consent to the deal between Seplat Energy and Mobil Producing Nigerian Unlimited (MPNU) is an indication that no new investors are wanted or desired in the sector.

A legal expert in the oil and gas sector of the country, Gbite Adeniji of ENR Advisory, while making comment on the development at the launching of a book, ‘From Oloibiri To Bonny’ written by Godswill S. Ihetu, a former managing director of the Nigeria Liquefied Natural Gas (NLNG) limited and group executive director of the Nigerian National Petroleum Corporation (NNPC) warned that Nigeria should not lose the opportunities being presented by the revolution in the gas industry as it has done with crude oil.

Others who spoke to Business Standards also toed the line of Mr.Gbite Adeniji by Saying that government action indicated that it is either new players are not wanted or desired in the oil and gas industry by the government.

The legal expert said the Seplat, MPNU deal presents the country with one of those great opportunities of boasting and bringing more investment to the oil industry, but it has now been allowed to escape. “Great opportunities in the past that would have moved the oil and gas industry to a higher level and increased government revenues have been carelessly been allowed  to slip off the country’s hand in the past because of lack of vision.”

Gbite Adeniji, who was a technical adviser to former Minister of State for Petroleum Resources, Emmanuel Kachukwu who presented the keynote address at the book launch stated further that Nigerians need to be worried about the happening in the oil and gas industry.

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According to him, the situation created the Russian –Ukraine war that is making Europe begin to look for alternatives to Russian gas presents a good opportunity for Nigeria to cash on.

Other stakeholders have argued that what Seplat Energy is acquiring is the company, MPNU, and not the joint venture assets and the government should not have refused the deal.

The Federal Government declined its consent to the proposed acquisition of oil and gas assets belonging to Mobil Producing Nigeria Unlimited (MPNU) by Seplat Energy,

The government among others cited overriding national interest as one of the reasons for rejecting the deal.

The Chief Executive, Nigeria Upstream Regulatory Commission NUPRC, Gbenga Komolafe, stated these in two separate letters addressed to the Chairman/ Managing Director, Mobil Producing Nigeria Unlimited, Mr. Richard Laing as well as the immediate past Chairman of Seplat Energy, Dr. ABC Orjiako. Both letters were dated May 13, 2022.

Seplat Energy plc had in February this year, announced its acquisition of oil and gas assets belonging to MPNU. But the deal was subject to Ministerial Consent and other required regulatory approvals.

However, few weeks after, it was reported that the Nigerian National Petroleum Company (NNPC) Limited had opted to exercise its Right of First Refusal (RFR) on the sale of the assets, which then put a hold on the transaction.

But Komolafe in the letter stressed that regardless of the mode of the transaction, Mobil Oil still remains to all intents and purposes, the assignor of the asset under Nigerian law.

“We also note that MPNU failed to follow the procedure for assignments laid down in the Guidelines by not providing the requisite notices to the Commission at all relevant stages of the transaction. Even if the transaction has been between Seplat Energy Offshore Limited and the MPNU shareholders, the responsibility to ensure compliance with Nigerian laws, rules and regulations always remains that of MPNU, the entity that was awarded the assets.

“We regret to inform you that His Excellency, the Minister of Petroleum Resources has declined his consent to the transaction.

“Nothing in this letter shall be deemed to be a waiver, on the part of the Commission, of any rights under the Guidelines, any law, rule or regulation, and the Commission reserves all its rights in respect of the subject matter. Please accept the assurances of my highest esteem,” the Commission’s boss stated in the letter addressed to Laing, with reference number: NUPRC/LD/1189/01, titled: “Re: Potential Sale and Purchase of the Equity (Shares) of Mobil Producing Nigeria Unlimited.”

Also, in the letter addressed to Orjiako, the regulatory commission also highlighted relevant sections in the Guidelines and Procedures for Obtaining Minister’s Consent to the Assignment of Interest in Oil and Gas Assets 2021.

“Thus, regardless of the mode of the transaction, MPNU, remains, to all intents and purposes, the assignor under Nigerian law and is the proper person to bring an application for Ministerial consent to the transaction, not Seplat. Consequently, you are hereby requested to revert to MPNU, the assignor, to receive updates on your application,” it stated.