The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has approved Eni, an Italian oil major, to sell Nigerian Agip Oil Company (NAOC) to Oando.
This was said in a statement posted on the energy company’s official website on Wednesday.
According to Eni, NAOC’s primary objectives in Nigeria are electricity generation and onshore oil and gas exploration and production.
The move by Eni is indicative of a larger movement by multinational oil firms (IOCs) to concentrate on the offshore and deepwater sectors of the oil and gas business and to sell their onshore holdings in Nigeria.
The 5% share in the Shell Production Development business Joint Venture (SPDJV), according to the business, was not included in the deal and will continue to be a part of Eni’s holdings.
What Eni Says
On its website, the business mentioned the following:
“The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has formally approved Eni’s sale of NAOC Ltd. to Oando Plc.”
“Having already obtained all other relevant local and regulatory authorities’ authorizations, this achievement will allow Eni to proceed to the completion of the transaction for the sale of Nigerian Agip Oil Company Ltd (NAOC Ltd), Eni’s wholly owned subsidiary focusing on onshore oil & gas exploration and production as well as power generation in Nigeria, to Oando PLC, Nigeria’s leading national energy solutions provider, listed on both the Nigerian and Johannesburg Stock Exchange.
“NAOC Ltd participating interest in SPDC JV (Shell Production Development Company Joint Venture – operator Shell 30%, TotalEnergies 10%, NAOC 5%, NNPC 55%) is not included in the perimeter of the transaction and will be retained in Eni’s portfolio.
“Eni remains committed to the country through investments in deepwater projects and Nigeria LNG.”
Eni and Oando reached an agreement in September 2023 for the sale of NAOC, a wholly-owned company that specializes in onshore oil and gas exploration, production, and power generation in Nigeria.
The Nigerian National Petroleum Corporation (NNPC) Limited, on the other hand, objected to the action, stating that Eni had not obtained the required regulatory body licenses to sell its Nigerian assets.
In reference to the NAOC/NEPL/OOL Joint Venture, NNPC claimed that the sale of Agip assets to Oando without their approval violated the terms of the joint operating agreement they signed in July 1991.
But a few weeks earlier, The News Chronicles revealed that Gbenga Komolafe, the head of NUPRC, had stated in a statement that the regulatory bodies now approved the energy business to proceed with the deal.
What to note
After decades of operations, Eni is following the trend of international oil companies (IOCs) pulling out of Nigeria’s onshore industry.
In the nation’s offshore fields, the Italian energy company is still a major player despite this change in strategy.
Major foreign oil firms have lately left Nigeria’s onshore oil business, making room for indigenous players.
Shell said in May 2024 that it would sell its 30% share in SPDC for up to $2.4 billion to a group made up mostly of local businesses.
In order to concentrate on more recent, lucrative ventures abroad, other IOCs, including ExxonMobil and Norway’s Equinor, have also sold assets in Nigeria in recent years.
