Atiku Abubakar Suspects Preferential Treatment In Oando Deal, Federal Government Clarifies

In a rather bold move, former Vice President and 2023 presidential candidate of the opposition Peoples Democratic Party (PDP), Atiku Abubakar, has called on the All Progressives Congress (APC)-led Federal Government to provide clarity on the recent accelerated approval granted to Oando Plc for the acquisition of AGIP and ENI’s onshore oil assets. Atiku expressed concerns about potential preferential treatment given to Oando, a company that belongs to President Bola Tinubu’s nephew – Wale Tinubu.

Oando Plc announced the successful acquisition of 100% of Nigerian Agip Oil Company Limited’s shares recently, marking a major leap for the former struggling oil company. However, Atiku, through his Special Assistant on Public Communication, Phrank Shaibu, accused the government of fast-tracking the approval for Oando. At the same time, other deals, such as those involving Shell/Renaissance and Mobil/Seplat, continue to face delays.

Preferential Treatment

In a detailed critique, Atiku highlighted the ongoing challenges within Nigeria’s oil and gas sector. He pointed out that the NNPC has allegedly ignored requests from the House of Representatives regarding the acquisition of OVH assets, arguing that this situation exemplifies the concerns of transparency and favouritism around the government.

Specifically, Atiku said, “Within just eight months, the Nigerian Upstream Production Regulatory Commission (NUPRC) approved a deal which saw the divestment of ENI/AGIP onshore assets to Oando. Within that same period, Nigeria controversially withdrew all litigation against Shell/ENI in the OPL 245 scandal in what has been described as a quid pro quo.

“However, the attempt by SEPLAT to buy Mobil’s onshore assets has continued to stall for the last three years even as the consent letter remains on Tinubu’s table. The deal between Renaissance and Shell continues to stall. The only deal that has fully scaled through so far involves Oando. We now know why it got accelerated approval.

“Ideally, democracy ought to be government of the people, for the people, and by the people. But democracy in Nigeria has become the government of Tinubu, by Tinubu, and for Tinubu and his family members.”

Fuel Subsidy Scam

Atiku’s statement also touched on other concerns, including the government’s handling of the fuel subsidy and its impact on the economy and accusations of human rights abuses under the Tinubu administration. He demanded greater accountability and transparency, particularly in managing Nigeria’s oil assets.

“Despite the rot in the oil sector, the heads of the NNPC, the NUPRC, and the NMDPRA continue to keep their jobs. This is clear evidence that they are fulfilling the mandate given to them by Tinubu”, Atiku said.

“Furthermore, Atiku pointed out that the NNPC lied in its vacuous response to their statement last week, as it is on record that the Kyari-led management appointed Huub Stoksman, a former Chief Executive Officer of OVH Energy, as Managing Director of NNPC Retail, and Mumuni Dangazau, the former Chief Operating Officer of OVH Energy, as his Special Adviser Downstream, long before the consummation of the incestuous marriage of the entities.”

NUPRC Replies Atiku

In response, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) issued a statement Monday August 26, defending government of the allegations and reaffirming its commitment to transparency and due process in approving divestment activities. The NUPRC emphasized that the “consent to Oando and Chappal Energies were fulfilled according to the regulatory process”.

The Commission further said it “wishes to assure the public that the process for approving divestment applications is guided by the provisions of the PIA and clearly defined frameworks in the assignment regulations, guided by international best practices.”

NUPRC’s Full Statement

PRESS STATEMENT
UPDATE ON SOME IOC DIVESTMENT ACTIVITIES

In line with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC)’s avowed commitment to transparency and belief in the right of the public to know about our regulatory activities, we wish to keep the public abreast of the status of certain divestments that have received ministerial consent and the divestment by Mobil Producing Nigeria Unlimited (MPNU), which has been subject to a lot of public attention.

As the public may be aware, ministerial approval was recently granted to the divestment by NAOC to OandoPetroleum and Natural Gas Company Limited (OandoPNGCL) and OANDO Oil II Cooperatief U.A. (OANDO Cooperatief) (together the “Oando Entities”) and by Equinor Nigeria to Chappal Energies. The Commission wishes the public to be aware that the approvals given to the NAOC-Oando and Equinor – Chappal divestments were in accordance with the Petroleum Industry Act (PIA) 2021, defined regulatory framework, and standard consent approval process set by the Commission under the PIA.

The divestment by MPNU to Seplat Energy Offshore Limited (Seplat) is also currently undergoing the same consent approval process and is expected to be completed within the 120-day timeline provided by the PIA.

Perhaps it would be necessary to give a further breakdown of the processes that saw the divestment of assets by NAOC to the OANDO Entities as an example and the divestment of shares in Mobil Producing Nigeria Unlimited (MPNU) to Seplat.

To be sure, the consent to Oando and Chappal Energies were fulfilled according to the regulatory process.
In respect of the NAOC Divestment, NAOC by a letter of May 16, 2023, notified the Commission of its intention to proceed with the divestment of participating interests in some of its oil and gas assets. The Commission by a letter dated May 21, 2023, requested NAOC to provide information on the proposed assignee. NAOC by another letter dated July 24, 2023, notified the Commission that it had completed the technical evaluation of the companies shortlisted for the proposed transaction and submitted OANDO PNGCL and OANDO Coöperatief as qualified companies for the consideration of the Commission.

The Commission by a letter dated August 9, 2023, granted approval to NAOC to proceed to the commercial stage of the transaction. Consequently, NAOC, vide a letter of November 7, 2023, made a formal application requesting the consent of the Minister of Petroleum Resources to the NAOC Divestment. In line with its processes, the Commission by a letter dated December 14, 2023, requested the information contained in the Commission’s due diligence checklist on the transaction and NAOC by a letter dated January 10, 2024, provided the information requested via the Commission’s letter dated December 14, 2023.

Consequently, the process was conducted in compliance with the requirements of relevant legislations, regulations and guidelines including the Petroleum Act, Petroleum Industry Act, Petroleum Drilling and Production Regulations, and the Upstream Asset Divestment and Exit Guidance Framework. The Divestment Framework evaluated the divestments based on Technical Capacity, Financial Viability, Legal Compliance, Decommissioning and Abandonment, Host Community Trust and Environmental Remediation, Industrial Relations and Labour Issues, as well as Data Repatriation. Additionally, NAOC obtained a waiver of pre-emption and consent to the divestment from NNPC, their partner on the blocks.

To ensure due diligence, the Commission, working with reputable external consultants identified significant pre-sale liabilities inherent in the assets to be divested by NAOC and proactively devised measures to ensure that the identified liabilities are adequately provided for.

Furthermore, the Commission's thorough evaluation and due diligence process, anchored on the Seven Pillars of the Divestment Framework, ensured that potential assignees were capable and compliant with legal requirements and that all legacy liabilities were identified and appropriately managed. The Commission subsequently made recommendations to the Honourable Minister of Petroleum Resources based on comprehensive assessments which covered the timeline for review of application under the PIA and the Commission’s regulatory process.

The Equinor-Chappal divestment followed the same regulatory process as the NAOC-Oando transaction.

On a comparative basis, MPNU through a letter dated February 24, 2022, notified the Commission of its intention to assign 100% of its issued shares to SeplatOffshore Energy Limited. The Commission did not consent to this assignment because MPNU failed to obtain a waiver of pre-emption rights as well as the consent of NNPC, its partner on the blocks to the divestment.

It is worth pointing out that NNPC’s right to pre-emption and consent under the NNPCL/MPNU Joint Venture Joint Operating Agreement was the subject of Suit No: FCT/HC/BW/173/2022 Nigerian National Petroleum Company Limited versus Mobil Producing Nigeria Unlimited, Mobil Development Nigeria Inc., Mobil Exploration Nigeria Inc. and Nigerian Upstream Petroleum Regulatory Commission.

In June 2024, NNPC and MPNU resolved their dispute with NNPC, and MPNU, by letter dated 26 June 2024 informed the Commission of the resolution of the dispute. Upon resolution of this dispute, the Commission communicated its no-objection decision to the assignment via a letter dated July 4, 2024 and requested MPNU to provide information and documentation required under the Commission’s due diligence checklist to enable the Commission conduct its due diligence as required under the PIA. MPNU by letter dated 18 July 2024 provided the information requested by the Commission. Accordingly, MPNU’s application to the Commission for consent is currently undergoing due diligence review, under the same Divestment Framework applied to the NAOC-Oando and Equinor-Chappaldivestment. The Commission’s due diligenceprocess is ongoing and within the 120-day timeline required by the PIA.

Given the above, the Commission wishes to assure the public that the process for approving divestment applications is guided by the provisions of the PIA and clearly defined frameworks in the assignment regulations, guided by international best practices.
NUPRC, as an organisation guided by law and professionalism, will continue to pursue its statutory mandate in a legal, independent, technical, commercial, and professional manner, operating under the authority of the PIA.

Signed: OLAIDE SHONOLA (MRS)
HEAD, PUBLIC AFFAIRS UNIT
NUPRC
August 26, 2024