•Says no consultation held
From Uche Usim, Abuja
The Nigerian National Petroleum Company Limited (NNPCL) has picked holes in the ongoing onshore asset divestment deal between ENI and Oando, describing it as lacking in transparency and a complete disregard to due process.
The Chief Corporate Communications Officer, Corporate Communications Department, NNPCL, Mr Garba Deen Muhammad, noted that while the national oil company was not objecting to the deal, it needed to draw attention to certain vital clauses in the Joint Operating Agreement (JOA), which might have been overlooked in error.
He added that strict adherence to those clauses will protect joint venture transactions now and in the future.
Further advancing its argument in a letter, the NNPCL insisted that its consent or blessings as a joint venture member operating ENI’s onshore asset were not secured before it set machinery in motion to divest its onshore assets to Oando.
According to the national oil company, the decision to bypass it to enter into a divestment deal, despite being a major stakeholder in the arrangement, was ill-advised and a gross infraction capable of precipitating legal crisis and fracturing hydrocarbon exploration under a joint venture template.
In a letter to the Managing Director of Nigerian Agip Oil Company Limited, dated September 4, the NNPCL said if the deal goes through, it would have far-reaching contractual/legal implications in relation to the joint Operating Agreement dated July 1991 governing the operations of the NAOC/NEPL/OOL Joint venture. The letter was signed by Ali Muhammed Zarah, Managing Director of NNPC E&P Limited.
Italian oil major Eni issued a press release saying that it had signed an agreement with Oando, an energy solutions provider for the sale of all its stake in Nigerian Agip Oil Company Limited (NAOC Ltd), a wholly-owned subsidiary focusing on onshore oil & gas exploration and production in Nigeria, in addition to power generation.
However, the NNPCL emphasized that going by the dictates of the agreement, a party seeking to transfer part or the whole of its participating interest in the Joint Venture is expected (by obligation) to secure a written approval of the other parties in the deal, especially since it controls 60 percent of the stake.
The letter reads in part: “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,”
“We have highlighted the above provisions of the JOA to underscore the point that the purported assignment, even if valid, should by no means translate to transfer of operatorship to OOL. if NAOC’s divestment turns out to be valid, it will be incumbent on NEPL and OOL to decide on a successor operator.” The NNPCL in the letter noted that the failure to obtain the written consent of its NEPL, its subsidiary that handles upstream operations, constituted a “grave breach of the terms of the JOA and NEPL reserves its rights in relation to the said breach”.
The national oil company added that the need to respect agreements cannot be overemphasized, as it is the guiding light for rancour-free and healthy operations in the oil and gas sector.