Akinosho: Handling of Seplat-ExxonMobil Deal Unhealthy for Nigeria’s investment Environment

Gilbert Ekwugbe

Oil and gas insider and publisher of Africa Oil and Gas Report, Toyin Akinosho, has faulted the position of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) on President Muhammadu Buhari’s consent to the sale of ExxonMobil USA’s whole shares in Mobil Producing Nigeria Unlimted (MPNU) to Seplat Offshore Limited, a subsidiary of Seplat Energy Plc. 

Akinosho said such action was capable of further de-marketing Nigeria’s already challenged investment environment adding, “if a company (Seplat) is willing to spend $1.3 billion to acquire another company (MPNU) and that has done so well in terms of production over time, I think we should give that company a chance.”

Fielding questions on “The Morning Show”, a programme on Arise News Channel, the broadcast arm of THISDAY Newspapers,  Akinosho said “the overall issue speaks of very poor organisation of a Nigerian agency.”

He maintained: “It is such a public spat in my view that you have three different press releases in a space of four hours giving different interpretations to a ministerial consent. We first heard from the President. That is the highest authority and that is the Minister of Petroleum Resources and we are dealing with a ministerial consent.

“And just around the close of business, the regulator speaks and says there hasn’t been any consent. This is not very good in the public eyes. In fact, the whole idea that the Nigerian National Petroleum Company (NNPC) was moving against Seplat, in my view, has always been poor marketing of Nigeria’s investment environment.

“But the main point is, even if the President is procedurally wrong in making the announcement, could the NUPRC openly insist that he was wrong? For whatever it is worth, for the Nigerian investment environment that has basically been taking a heat; that a whole lot of investors have been facing challenges, it is not looking good to see what you might call divisiveness in the petroleum industry governance”.

The publisher also said there was a difference between sale of a whole company and sale of a company’s participating interest in a Joint Venture.

“If you are selling your stake in a Joint Venture, I understand that the NNPC could say, you will need to ask us because we are partners with you already. Sell it to us. But if you tell them that you just want to leave and you are selling your entire company to another organisation, that is a different thing altogether and that is where this deal is coming from.

“However, NUPRC is saying that the President could not go out and say it had granted ministerial consent. My sense is that probably the NUPRC recommended the decline of this assent. And on what basis?

“If you look at the press release the NUPRC had issued much earlier in the year, it said that ExxonMobil had not complied with the law. I don’t understand what aspect of the law because ExxonMobil simply wants to leave the shallow waters. And other companies have left. Eland Oil and Gas has left in this same way. ConocoPhillips left in this same way. When ConocoPhillips was selling to Oando, it didn’t say they were selling the Oil Mining Lease (OML). They said they were selling their company. Ashland did the same thing much earlier. So, there is precedent.

“ExxonMobil is not selling is not selling its segment in OML 67, 68, 94 and the rest. They are basically selling Mobil Producing Nigeria Unlimited the way Ashaland sold Ashland, the way ConocoPhillips sold its entire shares to Oando. ExxonMobil are themselves exactly the same way Eland Oil and Gas, which was listed in UK, sold to Seplat and this same government approved it.

“As far as I know, the President Buhari has signed off on ExxonMobil-Seplat transaction, the Attorney General has signed off on it. So, I really don’t understand where NUPRC is coming from”, he stated.