Nigeria’s state oil firm has raised reservations about Eni SpA’s sale of a subsidiary to native producer Oando Plc which might complicate the transaction.
The Italian agency introduced on Sept. 4 an settlement to promote to Oando one in all its items that has a 20 p.c working stake in 4 onshore oil and fuel blocks. The deal is the most recent in a string of asset gross sales concluded by worldwide producers in onshore and shallow-water areas of the Niger Delta.
The failure to acquire the Nigerian Nationwide Petroleum Co.’s prior authorization for the sale “constitutes a grave breach” of the contract governing the three way partnership that holds the 4 permits, the state-owned firm stated in a letter to the Eni subsidiary, which was dated Sept 4. and confirmed by Bloomberg. The NNPC “reserves its rights in relation to the stated breach” together with an entitlement to invalidate the settlement, the letter stated.
The letter is “not an objection to the transaction,” NNPC spokesman Garba Deen Muhammad stated by textual content message on Wednesday. It’s “solely drawing consideration to sure necessary clauses” within the three way partnership settlement that “might need been missed in error,” he stated. “Adherence to these clauses will shield the transaction now and sooner or later.”
Oando already had a 20 p.c curiosity within the licenses earlier than the deal was agreed, whereas the NNPC holds a 60 p.c stake. An Oando spokeswoman declined to touch upon the letter as a result of it was addressed to Eni. She stated the businesses had agreed the sale of shares in a subsidiary quite than the task of an curiosity within the three way partnership.
Eni denied committing any breach of the three way partnership settlement in promoting the subsidiary to Oando. Whereas NNPC has pre-emption rights, Eni had no obligation to tell the state agency upfront of the announcement, the Rome-based firm stated in a press release Thursday. “Preemption procedures and different consents shall be duly and punctiliously adopted,” it stated.
Oando stated in a press release on Sept. 4 that completion of the transaction is topic to ministerial consent and different regulatory approvals. The Nigerian Upstream Petroleum Regulatory Fee and a spokesman for President Bola Tinubu didn’t instantly reply to requests for remark.
Oil majors have been offloading onshore and shallow water blocks — positioned in a difficult working setting the place infrastructure harm from crude theft is an everyday incidence — to home producers for greater than a decade. The development is accelerating as worldwide companies concentrate on deep-water tasks within the West African nation.
Shell Plc and Exxon Mobil Corp. are additionally working to finalize gross sales that stalled underneath former President Muhammadu Buhari, who was succeeded by Tinubu in late Might. A lawsuit over alleged air pollution within the Delta is holding up Shell’s deal, whereas the NNPC has opposed Exxon’s settlement with Seplat Power Plc and asserted a proper to accumulate the permits itself.
Even when the transaction between Eni and Oando is legitimate, that doesn’t robotically imply the customer will inherit the operatorship of the 4 licenses, the NNPC stated within the letter. That shall be a matter for dialogue between the NNPC and Oando, it stated.
–With help from Alberto Brambilla.