Buhari withholds earlier approval for Exxon Mobil’s asset sale in Nigeria due to regulatory impasse
Exxon Mobil’s planned asset sale in Nigeria has been put on hold after President Muhammadu Buhari withheld his earlier approval for the transaction.
The president’s spokesman Garba Shehu confirmed this yesterday, telling Reuters that “the president has decided to allow the regulator to do their work. He is withholding his earlier given approval, for now, to allow the process to be completed. That is basically it.”
Recall that President Buhari, who also doubles as Nigeria’s Minister of Petroleum Resources, had consented to the deal earlier this week.
Business Insider Africa reported that the approval would enable Seplat Energy to purchase Exxon Mobil’s shallow water assets for a $1.28 billion up-front payment.
Following the president’s approval, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) reacted by insisting that the deal cannot be finalised without its prior consent.
“The issue at stake is purely a regulatory matter and the commission had earlier communicated the decline of ministerial assent to ExxonMobil in this regard. As such the Commission further affirms that the status quo remains,” the NUPRC said in reaction to President Buhari’s consent earlier this week.
Note that Nigeria’s newly passed petroleum law gave the NUPRC the sole authority to approve such transactions.
According to the new law, the Minister of Petroleum Resources can only consent to such a deal upon recommendation by the NUPRC.
The new law also specified that licensed oil exploration companies cannot transfer their licence, power or interest to a third power without approval from the NUPRC.
The law did not, however, say whether the approval of the Petroleum Minister can override that of the NUPRC.
Regardless, the President/Minister of Petroleum Resources has now decided to allow the regulator to decide whether to approve the deal.
In the meantime, Seplat Energy released a statement via the Nigerian Exchange, informing its stakeholders that it has become aware of the development. It also assured that it would work with all the stakeholders to actualise the desired outcome.
