NUPRC ‘optimistic’ on Exxon asset sale to Seplat

The head of Nigeria’s oil regulator said he is “very optimistic” that Exxon Mobil’s asset sale to Seplat Energy can move forward, he told Reuters on Wednesday. The regulator last year refused to approve the $1.28 billion sale, a deal some in the industry say is key to getting much-needed investment into Nigeria’s oil and gas sector. “We are very optimistic that parties to the transaction will go back, look at the position of the regulator and come back by abiding by the provisions of Nigerian laws and the right thing will be done,” Gbenga Komolafe, chief executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), told Reuters on the sidelines of Africa Oil Week in Cape Town.

Komolafe said once Exxon had made proper agreements with its joint-venture partners in the assets, “the regulator will do what it needs to”. Seplat CEO Roger Brown told Reuters he was “hopeful” the deal could be concluded this year. “We have very good relationships with the regulator and that is why it takes time and the NNPC is a partner to us and we want to respect the partnership …Now we are starting to get to that crux point to try and resolve the issue,” he said. ExxonMobil did not immediately comment. NNPC had opposed the sale, arguing it had pre-emptive rights to the assets. NNPC has not publicly commented on whether it made an offer to buy the assets.

Nigeria, Africa’s largest oil exporter, relies on petroleum for 90% of its foreign exchange and half its budget. But production has declined in recent years due to underinvestment and theft. Several international oil majors are looking to sell onshore assets, but those deals have run into legal and regulatory hurdles. Last month, NNPC said a subsidiary of Italy’s Eni did not obtain its consent prior to announcing a deal to sell onshore oil assets to local company Oando, a failure that it said could have breached terms of a joint operating agreement.