The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) says approvals given for the divestment deal of two oil companies were in line with Petroleum Industry Act (2021).

The companies are Nigerian Agip Oil Company Limited (NAOC Ltd.) by Oando Plc. and Equinor Nigeria Energy Company (ENEC), by Chappal Energies.

Mrs Olaide Shonola, NUPRC’s Head of Public Affairs, made this known in a statement on Monday in Abuja.

Shonola said that the divestment by Mobil Producing Nigeria Unlimited (MPNU) to Seplat Energy Offshore Limited is currently undergoing the same consent approval process and would be completed within 120-day timeline provided by the PIA.

Former Vice President Atiku Abubakar had asked the Federal Government to explain why Oando Plc got an accelerated approval to acquire AGIP/ENI.

The approval for Oando is to buy the onshore assets of the company.

Atiku had alleged that other transactions such as the Shell/Renaissance deal and the Mobil/Seplat continue to suffer delays.

Reacting to this, Shonola said 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.

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“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.

“It submitted OANDO PNGCL and OANDO Coöperatief as qualified companies for the consideration of the Commission.

“The Commission by a letter dated Aug. 9, 2023 granted approval to NAOC to proceed to the commercial stage of the transaction,” she said.

Shonola said, in line with its processes, the Commission by a letter dated Dec. 14, 2023, requested the information contained in the Commission’s due diligence checklist on the transaction.

She said NAOC by a letter dated Jan. 10, 2024, provided the information requested via the Commission’s letter dated Dec. 14, 2023.

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Consequently, she said, the process was conducted in compliance with the requirements of relevant legislations, regulations and guidelines.

This, she said, included the Petroleum Act, Petroleum Industry Act, Petroleum Drilling and Production Regulations, and the Upstream Asset Divestment and Exit Guidance Framework.

She said the Divestment Framework evaluated the divestments based on Technical Capacity, Financial Viability, Legal Compliance, Decommissioning and Abandonment, Host Community Trust and Environmental Remediation among others.

Additionally, she said, NAOC obtained a waiver of pre-emption and consent to the divestment from NNPC Ltd., their partner on the blocks.

She said to ensure due diligence, the Commission, working with reputable external consultants identified significant pre-sale liabilities inherent in the assets to be divested.

Furthermore, she said, 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.

“The Commission subsequently made recommendations to the Minister of Petroleum Resources based on comprehensive assessments which covered the timeline for review of application under the PIA and the NUPRC’s regulatory process.

“The Equinor-Chappal divestment followed the same regulatory process as for the NAOC-Oando transaction,” she said.

“NUPRC assures the public that the process for approving divestment applications is guided by PIA provisions and clearly defined frameworks in the assignment regulations, guided by international best practices,” she said.