Eni Approves Divestment of Nigerian Agip Oil Company to Oando PLC

In a significant development for Nigeria’s oil and gas sector, Eni has received federal government approval to divest its wholly-owned subsidiary, Nigerian Agip Oil Company (NAOC), to Oando PLC. This move, announced during Nigeria’s Oil and Gas Week in Abuja by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), marks a pivotal shift in the country’s energy landscape.

Gbenga Komolefe, CEO of NUPRC, confirmed the completion of the deal, stating, “NAOC-Oando divestment has been concluded. Signing ceremony will come up any moment.” The transaction excludes NAOC’s interest in the Shell Production Development Company Joint Venture (SPDC JV), which will remain in Eni’s portfolio.

Currently, NAOC holds stakes in four onshore blocks comprising Oil Mining Licenses 60, 61, 62, and 63, as well as interests in two power plants (Okpai 1 and 2) and two onshore exploration leases (Oil Prospecting License 282 and OPL 135).

Eni emphasized its continued presence in Nigeria through Nigerian Agip Exploration and Agip Energy and Natural Resources, focusing on operated offshore activities.

Regarding another major deal in the sector, Komolafe disclosed that NUPRC is awaiting ministerial consent for the $1.2 billion ExxonMobil downstream assets sale to Seplat Energy. This approval process follows a settlement agreement between Nigerian National Petroleum Company (NNPC) Limited and Seplat Energy Plc for ExxonMobil’s stake in Mobil Producing Nigeria Unlimited (MPNU).

The agreement, which had faced obstacles including legal challenges, is seen as crucial for boosting regulatory approval after consultations involving top executives and stakeholders.

At the Nigeria Oil and Gas event, international oil companies (IOCs) urged the federal government to prioritize competitive fiscal terms to attract investments into Nigeria’s oil and gas sector. Elohor Aiboni, Managing Director of Shell Nigeria’s Exploration and Production Company Limited, emphasized the need for more competitive fiscal policies to enhance investment attractiveness.

Jim Swartz, Chairman and Managing Director of Chevron Nigeria’s mid-Africa business unit, echoed the sentiment, stressing that competitiveness, not just attractiveness, is essential for the deepwater business sector.

Adesua Dozie, Vice-Chairman of the Boards of the Companies at ExxonMobil, highlighted the importance of predictability and stability in investment frameworks to sustain deepwater projects in Nigeria.

Nigeria, a leading oil exporter in Africa, faces challenges such as theft, under-investment, and community disputes, which have hindered production in recent years. The divestment initiatives by Eni and ExxonMobil’s pending asset sale underscore efforts to streamline operations amid evolving market dynamics and regulatory landscapes.

As Nigeria navigates these transitions, the outcomes of these transactions are poised to shape the future trajectory of its oil and gas industry, influencing both domestic energy security and international investment confidence.

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