The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has clarified that Oil and Gas assets in Nigeria can only be transferred in accordance with the requirements of the Petroleum Industry Act (PIA 2021).
NUPRC said that assets could be transferred in accordance with PIA (where applicable), the Guidelines and Procedures for Obtaining Minister’s Consent to the Assignment of Interest in Oil and Gas Assets, 2021 (together with the “Applicable Laws”).
Mr Gbenga Komolafe, the Commission’s Chief Executive (CCE), made this known in a statement on Saturday while reacting to the ongoing social media discussions that certain International Oil Companies have completed sales of some of their assets to some indigenous companies.
Komolafe said that the transfer could only be consummated upon the grant of Ministerial Consent, following a recommendation from the commission, and satisfaction of the conditions for the grant of the consent by the Minister.
“The attention of the NUPRC has been drawn to the ongoing discussions in the social media suggesting that certain International Oil Companies (“Divesting Companies”) have completed the sale of some of their oil and gas assets to some Nigerian companies.
“NUPRC wishes to clarify that oil and gas assets in Nigeria can only be transferred in accordance with the requirements of the PIA, Petroleum Act (where applicable), the Guidelines and Procedures for Obtaining Minister’s Consent to the Assignment of Interest in Oil and Gas Assets, 2021 (together the “Applicable Laws”).
“Under Nigerian law, while the entering into of a Sale and Purchase Agreement (SPA) between an assignor and an assignee constitutes an agreement to sell the relevant licence or lease in accordance with the terms of the SPA, the transfer can only be consummated upon the grant Of Ministerial Consent,” he said.
Furthermore, Komolafe said that the Commission’s recommendation to the Minister to grant Ministerial Consent for the transfer of a licence or lease will be based on a detailed and diligent review of the transaction by the commission.
This, he said, would ensure the acquirers had the requisite competence in technical and financial ramifications, fulfilment of decommissioning and abandonment obligations; sustainability of environmental, social and corporate governance.
Komolafe said the review would ensure compliance with host community obligations, industrial and labour relations framework, confirmation that there are no legal encumbrances hindering the consummation of the transaction.
He added that it would ensure that the acquirers are fit and proper persons and acceptable to the Federal government of Nigeria.
Ko,olafe said, “These are criteria for the continued operational efficiency and effectiveness in the operations of the assets to ensure a sustainable increase in Nigeria’s oil and gas reserves and production.
“The Commission wishes the public to note that all the Divesting Companies and their potential assignees are familiar with the divestment process under the Applicable Laws and are currently complying with the relevant requirements.
“Accordingly, the general public is invited to note that the assets purported to have been sold by the Divesting Companies cannot be deemed sold yet, as the Commission is currently carrying out due diligence on the transaction.
“This will ensure that the divestment does not result in unwarranted liabilities for the Federal Government of Nigeria.”