Following months of delays, Nigeria's upstream regulator has approved oil asset sales of Eni and Equinor to local firms as international majors look to divest Nigerian operations.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has approved the proposed sale of Nigerian Agip Oil Company Ltd (NAOC Ltd), Eni's wholly-owned subsidiary focusing on onshore oil and gas exploration and production in Nigeria, as well as power generation, to Oando PLC. The regulator has also given the green light to Equinor to sell its Nigerian business to Project Odinmim, NUPRC chief executive Gbenga Komolafe said at an industry event in Nigeria.
However, the oil regulator has yet to approve divestment deals that U.S. supermajor ExxonMobil and UK-based giant Shell have proposed.
Earlier this year, ExxonMobil, Shell, Eni, and Equinor were waiting for government clearance for their sales of oil assets. The lengthy approval process was frustrating both buyers and sellers who said that the slow progress continued to hamper the rebound in Nigeria's oil production. The buyers and Nigeria's domestic oil producers expect the approvals to give clarity to the companies and revive oil production in the country.
ExxonMobil intends to sell its shallow water business in Nigeria to Seplat, the biggest Nigerian energy company by market value, in a $ 1.3 billion deal, which has yet to be approved by the regulator.
NUPRC's Komolafe said that "significant progress was made" in the process to approve Exxon's deal, while the regulator is currently reviewing the proposed Shell divestment.
Shell said earlier this year that it would exit Nigeria's onshore oil and gas industry but would remain a major investor in the country's energy sector through its deepwater and Integrated Gas businesses.
Shell has struggled with its onshore business in Nigeria for years and has had its fair share of troubles there, including several lawsuits over oil spills from local communities.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More