Nigerian Agip Oil Company has admitted that it did not have NNPC Limited’s approval before announcing a contract to transfer its onshore oil assets to Oando PLC.
According to TheTimes, Oando Plc and ENI have reached an agreement for the purchase of all the shares of Nigerian Agip Oil Company Limited. The Ministerial Consent and other necessary regulatory permissions had to be received before the acquisition could be finalized.
According to Reuters, the NNPC’s objections prompted questions about the transaction’s speed, reflecting the challenges that foreign oil corporations have been having selling their onshore oil and gas assets in Nigeria.
NNPC stated that the transfer of Agip assets to Oando without their agreement violates the Joint Operating Agreement for the NAOC/NEPL/OOL Joint Venture, according to a letter from NNPC written by the MD of NNPC E&P Limited, Ali Muhammed Zarah.
NNPC spokesperson, Garba Deen Muhammad responded to the letter by saying that it did not appear to raise any objection to the deal.
“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 holds a 60% stake in a NAOC joint venture.
The parent firm of NAOC, ENI, reportedly told Reuters that there had been no violation of the joint venture agreement.
“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.
Here is the background story:
ENI and Oando Plc entered into an agreement for the purchase of 100% of the shares of Nigerian Agip Oil Company Limited, a major domestic provider of energy solutions.
Ministerial permission is necessary, together with any other necessary regulatory approvals, for the acquisition to be completed.
The acquisition, according to Oando Plc’s Group CEO Wale Tinubu CON, would allow the energy firm to take advantage of new prospects.
He added that the acquisition emphasizes the significant role local firms will play in the development of Nigeria’s upstream industry.
