"NEPL is only drawing attention to certain important clauses in the Joint Operating Agreement (JOA) between it, NAOC and OOL..."
The Nigerian National Petroleum Company Limited (NNPCL) on Thursday said it is not against the sale of shares of Nigerian Agip Oil Company Limited (NAOC) to Oando Plc (OOL).
The NNPCL said this in a statement by GarbaDeen Muhammad, the chief corporate communications officer of the company.
Oando had on Monday announced it had agreed to buy the Nigerian exploration and production unit of Italian oil major Eni.
The consummation of the deal is subject to ministerial consent and other regulatory authorisations, a statement by Nigeria's leading indigenous energy solutions provider said.
The agreement is expected to clear the way for Oando to acquire 100 per cent of the shares of Nigerian Agip Oil Company Limited (NAOC), which has interests in four onshore blocks and two onshore exploration leases in the country.
It will ramp up Oando's current participating interests in OMLs 60, 61, 62 and 63 from 20 to 40 per cent.
"It increases Oando's ownership stake in all NEPL/NAOC/OOL Joint Venture assets and infrastructure, which include forty discovered oil and gas fields, of which twenty-four are currently producing, approximately forty identified prospects and leads, twelve production stations, approximately 1,490 km of pipelines, three gas processing plants, the Brass River Oil Terminal, the KwaleOkpai phases 1 & 2 power plants (with a total nameplate capacity of 960 MW), and associated infrastructure," the statement said.
The transaction also expands Oando's exploration asset portfolio via the purchase of a 90 per cent stake in OPL 282 and a 48 per cent stake in OPL 135.
NAOC's participating interest in Shell Production Development Company Joint Venture (operator Shell 30 per cent, TotalEnergies 10 per cent, NAOC 5 per cent, NNPC 55 per cent) is not part of the deal and so will be retained in Eni's portfolio, Oando said.
However, following the transaction, the NNPC Exploration and Production Limited (NEPL) raised concerns over the deal.
In a letter with reference number E&P/MD/0523 dated 4 September, addressed to the Managing Director, Nigerian Agip Oil Company Limited and signed by the Managing Director, NEPL, Ali Zarah, the oil form said it's yet to confirm the authenticity of the Oando agreement with ENI for the acquisition of its shares of NAOC.
"We are yet to confirm the authenticity of the said divestment, we would like to note that the purported assignment, if true, would have the following far-reaching contractual/legal implications in relation to the Joint Operating Agreement (JOA) dated July 1991 governing the operations of the NAOC/NEPL/OOL Joint Venture," it reads.
The letter explained that clause 19.1.1 of the JOA provides that "No party may assign or transfer its interest or any part thereof without the prior written consent of the other Parties, which consent shall not be unreasonably withheld.
By virtue of this provision, it said, a Party seeking to transfer part or the whole of its participating interest in the Joint Venture is obligated to seek the prior written consent of the other parties.
In this instance, it said, NAOC did not inform NEPL of any proposed assignment of its participating interest to OOL or any other party neither did NAOC seek and obtain the mandatory pre-divestment written consent and approval from NEPL in accordance with Clause 19.1.1. of the JOA.
NNPCL reacts
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Reacting on Thursday, the NNPCL said a routine communication in the form of a letter written by NEPL to NAOC is being interpreted to suggest that NNPCL is opposed to the sale of the shares.
"It has come to our notice that a routine communication in the form of a letter written by NNPC E&P Limited (NEPL) to its JV Partner, Nigerian Agip Oil Company Limited (NAOC) is being interpreted to suggest that NNPC Ltd is opposed to the sale of NAOC shares to Oando Plc. This is not correct," Mr Muhammad said.
He said that the letter was sent by NEPL, an NNPC Ltd subsidiary but nowhere was opposition or objection to the transaction mentioned in the letter.
"NEPL is only drawing attention to certain important clauses in the Joint Operating Agreement (JOA) between it, NAOC and OOL; which might have been overlooked in error. Adherence to those clauses will protect the transaction, now and in the future," he said.
