Yesterday, August 8, 2022, the Proshare research unit reported in a newspost titled “Seplat Takes Over Exxonmobil Nigeria Operations in Corporate Buyout” that President Muhammadu Buhari, in his capacity as Minister of Petroleum Resources consented to the acquisition of the entire share capital of Mobil Producing Nigeria Unlimited by Seplat Energy Offshore Limited.  

The news circulating in the popular media was substantiated by a press release from Seplat Energy Plc titled “Ministerial Consent to the Proposed Cash Acquisition of Mobil Producing Nigeria Unlimited by Seplat Energy”. In the release, Seplat noted that it published a letter from the Honourable Minister of State for Petroleum Resources, Timipre Sylva, that His Excellency, President Muhammadu Buhari had approved that Ministerial Consent be granted to the cash acquisition of the entire share capital of Mobil Producing Nigeria Unlimited (MPNU), a subsidiary of Exxon Mobil Corporation, by Seplat Energy Offshore Limited.  

Seplat’s press release also noted that the President directed the Minister of State to convey the Ministerial Consent to relevant agencies like Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigerian National Petroleum Company Limited (NNPC), ExxonMobil, Federal Competition and Consumer Protection Commission (FCCPC), and Seplat Energy.  

However, the position of the president on the ExxonMobil/Seplat deal seems to have conflicted with the provisions of the PIA as the NUPRC affirmed that an order of status quo remains in place on the ExxonMobil/ Seplat Energy share acquisition. Specifically, the CEO of the NUPRC, Engr Gbenga Komolafe, noted that the Commission in line with the provisions of the Petroleum Industry Act (PIA) 2021 is the sole regulator in dealing with such matters in the Nigerian upstream sector.  

According to the PIA 2021 (part II section 95), in terms of Assignment, merger, transfer and acquisitions, (1) A holder of a petroleum prospecting licence or petroleum mining lease shall not assign, novate, or transfer his licence or lease or any right, power or interest without the prior written consent of the Minister. (2) The consent of the Minister under subsection (1) of this section shall be granted upon the recommendation of the Commission. 

While some analysts believe ministerial consent in this instance supersedes the commission’s position quoting different aspects of the PIA, other analysts argue that the commission is empowered to decline the ministerial asset, also quoting some aspects of the PIA such as section 95(15) which states that A holder of a petroleum exploration licence shall not assign, novate or transfer his licence or lease or any right, power or interest without the prior written consent of the Commission.  

Proshare analysts believe the ongoing issue underscores a fundamental flaw in the governance structure around the first objective of the PIA, which is to create efficient and effective governing institutions, with clear and separate roles for the petroleum industry.