Nigerian govt approves Eni’s sale of local unit to Oando

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has granted approvals for the sales of local units of Eni SpA and Equinor ASA, marking significant developments in Nigeria’s oil sector.

The approvals pave the way for the acquisition of Nigerian Agip Oil Company (NAOC) by Wale Tinubu-run Oando, and Equinor’s assets by Project Odinmim Investments Ltd.

Announced in September 2023, the sale of NAOC to Oando includes the transfer of interests in four onshore oil mining leases: OML 60, 61, 62, and 63. The transaction faced delays due to regulatory requirements under the new petroleum industry law, which mandates ministerial approval.

Gbenga Komolafe, head of the NUPRC, confirmed the approval during an energy conference in Abuja on Wednesday.

The NUPRC also approved the sale of Norway’s Equinor’s assets to Project Odinmim, he said.

“The [Eni] divestment has been concluded and the signing ceremony will come up any moment,” said Mr Komolafe. “The Equinor-Project Odinmim project divestment was also completed.”

Equinor said in November it entered into an agreement to sell its local business to Chappal Energies Mauritius Ltd. Project Odinmim is a special purpose vehicle used by the Mauritian company to complete the deal.

The transaction signifies a notable entry for Project Odinmim into Nigeria’s oil industry. Equinor Nigeria Energy held a 53.85% stake in oil and gas lease OML 128 and a 20.21% stake in the Agbami oil field, operated by Chevron Corp.

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The divestments are part of a trend where major oil companies, facing challenges pollution, theft, and vandalism, are divesting from onshore operations to focus on more secure and profitable ventures offshore.

In May, the NUPRC offered to hasten approvals if companies take responsibility for oil spills and provide compensation to affected communities. It was unclear if the companies agreed to the conditions to obtain the approvals.

Eni’s sale of NAOC to Oando does not include NAOC’s 5% share in Shell Petroleum Development Co., and Eni will continue participating in Nigeria LNG Ltd. and other assets.

Other similar sales remain pending. Shell Plc is in the process of selling its Nigerian units to Renaissance, a consortium of local companies, for $1.3 billion. Exxon Mobil Corp. is also awaiting ministerial consent for its deal with Seplat Energy Plc.

Mr Komolafe said the Shell divestment deal was being reviewed, while that of ExxonMobil had reached an advanced stage of approval. In June, NNPC withdrew its legal challenge to the ExxonMobil-Seplat deal, after the intervention of President Bola Tinubu.

The deal will increase London- and Lagos-listed Seplat’s output from 51,000 b/d of oil equivalent currently to 146,000 boe/d.