2023-09-07 12:01:18
Nigeria’s national oil company NNPC Ltd says a subsidiary of Italian firm Eni failed to obtain its consent before announcing the sale of onshore oil assets to local firm Oando PLC, a breach that may have violated the terms of a joint operating agreement, according to a letter seen by Archyde.com.
The letter casts doubt on the speed of the transaction, announced on Monday, and highlights the difficulties that major international oil companies have faced for years in their efforts to sell onshore oil and gas assets in Nigeria.
In the letter, dated September 4, NNPC states that Eni’s subsidiary, Nigerian Agip Oil Company Ltd (NAOC), did not seek its consent before announcing the transaction, and that its consent is required before transfer an interest in a joint venture.
The NNPC called the lack of prior written consent a “serious breach” of the Joint Operating Agreement (JOA).
The national oil company’s subsidiary, NNPC Exploration and Production Limited (NEPL), holds a 60% stake in a NAOC joint venture.
Eni, which does not comment on matters related to its subsidiary NAOC Ltd, did not immediately comment.
NNPC spokesman Garba Deen Muhammad confirmed that the NEPL had sent a letter to the NAOC, but said the letter did not indicate any objection to the transaction.
“The NEPL is only drawing attention to some important clauses of the JOA, which may have been overlooked in error. Compliance with these clauses will protect the transaction now and in the future,” he said. .
Oando declined to comment on the letter, but said, “We are confident that, as requested by NEPL, NAOC will engage accordingly to ensure its concerns are addressed.”
Oando also said that Eni did not sell its 20% stake in the NAOC joint venture to Oando, but signed an agreement to sell 100% of the shares of NAOC Ltd, subject to all approvals. regulators and partners, as well as due diligence.
Oil executives say closing asset sales is key to boosting investment in onshore oil and gas assets, but legal and regulatory issues have derailed other deals, including the sale of oil and gas assets. Exxon Mobil Corp (XOM.N) to local company Seplat.
Nigeria, which is generally Africa’s largest oil exporter, has struggled to pump in recent years due to theft and years of underinvestment. Almost all major international oil companies, including Shell and Exxon, are selling off onshore assets, despite oil thefts and spills, perpetual disputes with communities and more targeted exploration budgets. (Reporting by Libby George, additional information by Francesca Landini in Milan; writing by Emelia Sithole-Matarise)
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