September 6, (THEWILL) – The recent agreement by Oando Plc with Eni to acquire 100 percent stake in its (Eni’s) subsidiary – Nigerian Agip Oil Company (NAOC) Limited – may have suffered a setback as the Nigerian National Petroleum Corporation (NNPC) Limited has waged its big stick against the deal.
.The indigenous energy company had declared on Monday that it has reached a ground shaking deal to buy up all stakes held by Italian oil major, Eni, in the joint venture operated by NAOC Limited on behalf of the Nigerian National Petroleum Company (NNPC) Limited.
According to a statement filed on the Nigerian Exchange by Oando Plc, the completion of the transaction, which expands Oando’s current participating interests in oil mining leases (OMLs) 60, 61, 62, and 63, from 20 percent to 40 percent, is subject to ministerial consent and other required regulatory approvals.
However, the NNPCL in a letter to NAOC Limited dated September 4, 2023 seen by THEWILL, drew the attention of NAOC to relevant portions of the subsisting Joint Operating Agreement (JOA) governing the process of interests.
The national oil company further stated that the purported divestment of Eni’s shares to Oando Oil Limited violates Clause 19.11of JOA which 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.”.
The NNPC asked NAOC to confirm the reports making the rounds and the press statement purportedly emanating from NACO that it had assigned its entire 20 percent participating interest in the said OMLs to Oando Oil Limited.
It noted that NAOC did not inform the NNPC Exploration and Production Limited (NEPL) of any proposed assignment of its participating interest in Oando Oil Limited or any other party.
It added that NAOC did not seek and obtain the mandatory pre-divestment written consent and approval from NEPL in accordance with Clause 19.11 of the JOA.
“It is imperative for you to note that failure to obtain NEPL’s written consent and approval with regard to the alleged transfer of your interests in the joint assets constitutes a great breach of the terms of the JOA and NEPL reserves its rights in relation to the said breach — including NEPL’s entitlement to invalidate the purported assignment to OOL.” the letter stated.
The NNPC requested NAOC’s confirmation of the purported deal to enable it to determine the next line of action.
THEWILL recalls that the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) had threatened to withdraw its members from all offices and oil fields over the purchase of Eni Nigeria and Nigerian Agip Oil Company Limited by Oando Plc.
The Branch Chairman, Agip Group, PENGASSAN, Eyong Survival, disclosed this while speaking in Port Harcourt, Rivers State, on Tuesday.
The association kicked against the acquisition of the oil firms by Oando without interfacing or pre-informing the union adding that over 3,000 indigenous workers might lose their jobs over the sale of Eni Nigeria
Survival said the union had met with the company’s management when the sale of NAOC JV assets to Oando filtered into the public, but that the managing director allegedly denied any of such plans.
He said the sale of NAOC JV would throw a lot of PENGASSAN members into the labour market, considering the present harsh economic situation in the country.
The NNPC had also, last year, stopped a similar acquisition deal between Septlat Energyand ExxonMobil.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
