ExxonMobil’s divestment of its oil enterprise in Nigeria’s Niger Delta has been thrown into doubt after the nation’s president withdrew his support for the sale lower than three days after approving it.
Garba Shehu, spokesperson for Nigeria’s president Muhammadu Buhari, advised the Financial Times that the $1.28bn sale of Exxon’s 4 oil permits to native producer Seplat Energy had been placed on maintain pending an extra assessment by Nigeria’s petroleum regulator. Shehu stated: “Due process must be done.”
Seplat Energy, which is listed in each London and Lagos, stated it had acquired no official affirmation from the Nigerian authorities that Buhari’s approval had been rescinded, including that it was “seeking clarification” from the authorities.
Shares in Seplat Energy had been down virtually 6 per cent in London on Thursday. ExxonMobil, one of many world’s largest oil and gasoline corporations primarily based within the US, declined to remark.
The sudden reversal by Buhari, 79, who can also be the nation’s oil minister, is the newest twist after his resolution to approve the landmark deal.
At subject is who has the authority to approve the sale. Nigeria’s Petroleum Industry Act, signed into regulation by Buhari final 12 months, launched a brand new requirement that gross sales or transfers of oil licenses can solely proceed after the oil minister has been suggested by the regulator.
Gbenga Komolafe, head of the Nigerian Upstream Petroleum Regulatory Commission, stated simply hours after Buhari accepted the sale that he didn’t have the facility to authorise the deal.
“The issue at stake is purely a regulatory matter,” Komolafe stated in a press release.
However Seplat stated on Monday that Buhari’s approval had been granted beneath the earlier model of the act, ratified in 1969, beneath which the licenses in query had been initially signed.
The confusion not solely casts doubt on Exxon’s exit but additionally threatens to discourage future funding.
One Nigerian oil govt, who requested to not be recognized, stated the presidency was break up, with one aspect favouring Seplat’s bid and the opposite supporting an acquisition by the state-owned Nigerian National Petroleum Corp.
NNPC, which operates the permits in partnership with Exxon, secured a courtroom order to dam the deal in July, arguing that it had a contractual proper to pre-empt any sale.
Buhari appeared to have overruled the courtroom on Monday, earlier than altering course.
The oil govt stated NNPC’s supporters contained in the presidency argue {that a} sale to the state-oil firm can be in “Nigeria’s national strategic interests”.
Seplat stated it had turn into conscious of “reports alleging impropriety in the process of securing ministerial consent to the acquisition.”
“Such reports are wholly untrue and the company will pursue legal action against any parties involved in disseminating false information related to its business,” it stated in a press release.