The Nigerian National Petroleum Company Limited (NNPCL) has NNPCL faults sale of Agip of Oil Mining Licenses 60, 61, 62, and 63 to Oando Oil Limited by the Nigerian Agip Oil Company. In a letter signed by Ali Zarah, the Managing Director of NNPC Exploration and Production Limited, dated September 4, 2023, and addressed to the Managing Director of Nigerian Agip Oil Company Limited, NNPCL expressed reservations about this purported divestment.
The letter, with reference E&P/MD/05.23, titled ‘Purported divestment of Eni’s shares to Oando Oil Limited,’ stated, “Our attention has been drawn to various reports circulating on different media platforms in relation to an alleged divestment of NAOC’s participating interest in OMLs 60, 61, 62, and 63 to Oando Oil Limited.”
It further mentioned that while the authenticity of the alleged divestment had yet to be confirmed, there were contractual and legal implications if it were true. NNPCL pointed out that the Joint Operating Agreement dated July 1991 governing the operations of the NAOC/NEPL/OOL Joint Venture had provisions regarding the assignment of interests.
The letter highlighted that “Clause 19.11 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.’” NNPCL emphasized that NAOC did not inform NEPL (NNPC E&P Limited) of the proposed assignment, nor did it seek the mandatory pre-divestment written consent and approval from NEPL, which is a breach of the JOA terms.
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Furthermore, NNPCL pointed out that under the terms of the JOA, the assignment of interest had implications for the transfer of operatorship. “Clause 2.4.1(i)(c) of the JOA provides that the operator shall cease to be an operator and shall be removed by the non-operators if the operator assigns or otherwise disposes of, other than to an affiliate, all its participating interests.” It also mentioned that the parties should appoint a successor operator in such circumstances.
NNPCL, holding a 60% participating interest in the NEPL/NAOC/OOL JV, expressed its concern about the entire assignment not complying with the JOA terms and requested NAOC’s confirmation of the authenticity of the reported divestment to determine the next steps regarding the management and operations of the assets.
When contacted to confirm the authenticity of the letter, the Chief Corporate Communications Officer of NNPCL, Garba-Deen Mohammad, affirmed its originality but clarified that it was not an objection to the transaction. NEPL was highlighting important clauses in the JOA to ensure compliance for the protection of the transaction.
