By Saidu Abubakar
The Nigerian National Petroleum Company E & P has reacted to the purported divestment of Eni’s shares to Oando Oil Limited (OOL).
The Nigerian National oil Company said in a letter addressed to the MD of Nigerian Agip Oil Company Limited with ref. no. E&P/MD/05.23 dated 4th September, 2023 and signed by the MD of NNPC E&P, Ali Mohammed Zarah, it said: “Our attention has been drawn to various reports circulating on different media platforms in relation to an alleged divestment of NAOC’s participating interest in OMLs 60, 61, 62 and 63 to Oando Oil Limited (OOL).
“A duly signed press statement allegedly emanating from OOL dated 4th September 2023 affirms the fact that NAOC has assigned its entire twenty (20) percent participating interest in the said OMLS to OOL.
“Whilst we are yet to confirm the authenticity of the said divestment”, the letter stated, “we would like to note that the purported assignment, 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 the NAOC/NEPL/OOL Joint Venture”.
The letter further added thus:
- Clause 19.1.l 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. By virtue of this provision, a Party seeking to transfer part or
the whole of its participating interest in the Joint Venture is obligated to
seek the prior written consent of the other parties. In this instance, NAOC
did not inform NEPL of any proposed assignment of its participating
interest to OOL or any other party neither did NAOC seek and obtain the
mandatory pre-divestment written consent and approval from NEPL in
accordance with Clause 19.1.1l. of the J0A. - It is imperative for you to note that failure to obtain NEPL’s prior written
consent and approval with regards to the alleged transfer of your
interests in the joint assets constitutes a grave breach of the terms of the JOA and NEPL reserves its rights in relation to the said breach -including NEPL’s entitlement to invalidate the purported assignment to OOL. - Under the terms of the JOA, assignment of interest has implications on the transfer of operatorship. Clause 2.4.1(0)(c) of the JOA provides that the Operator shall cease to be Operator and shall be removed by the Non-Operators if the Operator assigns or otherwise disposes of, other than to an Affiliate, all its Participating Interest. Furthermore, Clause 2.6.1 provides that in the event of cessation of operatorship arising from the
above circumstance, the parties shall appoint one of the Non-Operators
as successor operator. 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 become incumbent on
NEPL and OOL to decide on a successor operator.
Please note that as holders of sixty (60) percent participating interest in the NEPL/NAOc/ooL IV, we are indeed concerned that the entire purported
assignment was executed without due compliance with the terms of the
JOA. We expect that all parties to the J0A will observe and comply with the
terms of the JOA.
In view of the foregoing, we request NAOC’S confirmation to NEPL, the
authenticity or otherwise of the reported divestment to enable us to
determine our next steps with regards to the management/operations of
the assets.