The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has provided clarification on the transfer of ownership of oil and gas assets in Nigeria, stating that such transfers can only occur with the consent of the Minister, as outlined in the 2021 Gbenga Komolafe
In a statement released by Mr. Gbenga Komolafe, the Chief Executive of the Commission, concerns arising from social media discussions about International Oil Companies selling assets to indigenous companies prompted the clarification. Komolafe emphasized that Ministerial Consent is a prerequisite for ownership transfers, and such consent is granted based on the commission’s recommendation and the fulfillment of specified conditions by the minister.
According to Komolafe, “NUPRC wishes to clarify that oil and gas assets in Nigeria can only be transferred in accordance with the requirements of the PIA, Petroleum Act (where applicable), the Guidelines and Procedures for Obtaining Minister’s Consent to the Assignment of Interest in Oil and Gas Assets, 2021.”
He highlighted that while the signing of a Sale and Purchase Agreement (SPA) between parties constitutes an agreement to sell the relevant license or lease in line with the SPA terms, the actual transfer requires Ministerial Consent.
In evaluating potential acquirers, Komolafe emphasized that the Commission’s recommendation for Ministerial Consent would involve a thorough examination of the transaction. This evaluation would include assessing the technical and financial competency of acquirers, their commitment to decommissioning and abandonment obligations, and their adherence to environmental, social, and corporate governance sustainability.
The review process would also consider host community obligations, industrial and labor relations frameworks, and confirm the absence of legal encumbrances affecting the transaction.
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