NNPCL KICKS AGAINST ACQUISITION OF 100 PER CENT STAKE IN AGIP NIGERIA BY OANDO
The Nigerian National Petroleum Commission Limited ( NNPC) has kicked against the acquisition of assets of Agip Oil Company by Oando PLC.
This happens as Oando recently struck a deal to acquire NAOC’s interest in Oil Mining Leases( OMLs 60,621,62 and 63, a development, which has generated wide discussions in the industry.
Recall that similar scenario played out between Seplat Energy and ExxonMobil months ago, as stakeholders were divided on the decision by Seplat Oil to buy a sizeable interest of Exxon Mobil in Nigeria.
While expressing discontent on the issue of Oando buying interest of AGIP in Nigeria, NNPCL in a letter to both the Manaing Director of Nigerian Agip Oil Company and the Chief Operating Officer of Oando Oil Limited (OOL) said the deal between the two companies was not good enough, as it is going to have huge legal and contractual implication in future.
“Our attention has been drawn to various reports circulating on different media platforms concerning an alleged divestment of NAOC participating in the OML mentioned above to Oando Oil Limited. A duly signed press statement allegedly emanating from OOL dated 4th September 2023 affirms that NAOC has assigned its entire 20 percent participating interest in the said OMLs to OOL.
“While we are yet to confirm the authenticity of the purported divestment, we would like you to note that the purported divestment, if true, would have the following far-reaching contractual/ legal implications in relation to the Joint Operating Agreement (JOA) dated July 1991 governing the operations of NAOC/NEPL/OOL joint venture.
The NNPCL through the letter with reference no E and P /MD/0623 dated 4th of September, titled “Purported Divestment of Eni Shares to Oando Oil Limited” and addressed to the managing director of Nigerian Agip Oil Company (NAOC), drew the attention of the company to the fact that Clause 19.11 of the JOA provides that “no party may assign or transfer any interest or any part therefore without prior written consent of the other parties, which consent shall not be unreasonably withheld”
The letter was signed on behalf of NNPC EandP Limited by Ali Muhammed Zarah, its managing director. The Group Chief Executive Officer of NNPCL, Executive Vice President of Upstream and the Chief Operating Officer of Oando Oil Limited were copied.
“It is imperative for you to know that failure for you to obtain NEPL’s prior written consent and approval with regards to the alleged transfer of your interest in the joint asset constitutes a grave breach of the terms of the JOA and NEPL’s reserves its right in relation to the said breach- including NEPL’s entitlement to invalidate the purported assignment to OOL
Please note that as holders of 60 percent participating interest in the NEPL/NAOC/ OOL JV, we are indeed concerned that the entire purported assignment was executed without due compliance with the terms of JOA.
“We expect that all parties to the JOA will comply and observe the terms of the JOA,” NNPCL stated
