THE Nigerian National Petroleum Company Limited, NNPCL, has kicked against Oando Plc’s acquisition of Nigerian Agip Oil Company onshore (land) assets in Nigeria.
The deal involving Oil Mining Lease, OMLs 60, 61, 62 and 63 was struck to enable Agip, Eni’s subsidiary, to escape from increasing exposure to challenges while providing Oando the opportunity to grow its assets base in the Niger Delta.
But in a letter to the managing director of Nigerian Agip Oil Company and the Chief Operating Officer of Oando Oil Limited, OOL, NNPC Limited, stated: “Our attention has been drawn to various reports circulating on different media platforms concerning an alleged divestment of NAOC participating in the OML mentioned above to Oando Oil Limited.
A duly signed press statement allegedly emanating from OOL dated 4th September 2023 affirms that NAOC has assigned its entire 20 percent participating interest in the said OMLs to OOL.
“While we are yet to confirm the authenticity of the purported divestment, we would like you to note that the purported divestment, if true, would have the following far-reaching contractual/ legal implications in relation to the Joint Operating Agreement (JOA) dated July 1991 governing the operations of NAOC/NEPL/OOL joint venture.”
The letter signed by Ali Muhammed Zarah, managing director, NNPC EandP Limited, which copies were sent to the Group Chief Executive Officer of NNPCL, Executive Vice President of Upstream and the Chief Operating Officer of Oando Oil Limited, stated: “It is imperative for you to know that failure for you to obtain NEPL’s prior written consent and approval with regards to the alleged transfer of your interest in the joint asset constitutes a grave breach of the terms of the JOA and NEPL’s reserves its right in relation to the said breach- including NEPL’s entitlement to invalidate the purported assignment to OOL
“Please note that as holders of 60 percent participating interest in the NEPL/NAOC/ OOL JV, we are indeed concerned that the entire purported assignment was executed without due compliance with the terms of JOA.”
It also added: “We expect that all parties to the JOA will comply and observe the terms of the JOA.”