…says It is a breach of the terms of JOA

As it did in the case between Seplat Energy and ExxonMobil, the Nigerian National Petroleum Company Limited (NNPCL) is set to replicate the same scenario among Oando and Nigeria Agip Oil Company NAOC, the two parties that recently struck a deal that will see Oando acquiring NAOC’s Interest in OMLs 60,61,62 and 63.

It has therefore written a letter to the managing director of Nigeria Agip Oil Company and the Chief Operating Officer of Oando Oil Limited (OOL) stating its discontent with the deal
According to the NNPCL letter, it states: Our attention has been drawn to various reports circulating on different media platforms concerning an alleged divestment of NAOC participating in the OML mentioned above to Oando Oil Limited. A duly signed press statement allegedly emanating from OOL dated 4th September 2023 affirms that NAOC has assigned its entire 20 percent participating interest in the said OMLs to OOL.

“While we are yet to confirm the authenticity of the purported divestment, we would like you to note that the purported divestment, 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 NAOC/NEPL/OOL joint venture.

The NNPCL through the letter with reference no E and P /MD/0623 dated 4th of September, titled “Purported Divestment of Eni Shares to Oando Oil Limited” and addressed to the managing director of Nigerian Agip Oil Company (NAOC), drew the attention of the company to the fact that Clause 19.11 of the JOA provides that “no party may assign or transfer any interest or any part therefore without prior written consent of the other parties, which consent shall not be unreasonably withheld”

The letter was signed on behalf of NNPC EandP Limited by Ali Muhammed Zarah, its managing director. The Group Chief Executive Officer of NNPCL, Executive Vice President of Upstream and the Chief Operating Officer of Oando Oil Limited were copied.

“It is imperative for you to know that failure for you to obtain NEPL’s prior written consent and approval with regards to the alleged transfer of your interest in the joint asset constitutes a grave breach of the terms of the JOA and NEPL’s reserves its right in relation to the said breach- including NEPL’s entitlement to invalidate the purported assignment to OOL

Please note that as holders of 60 percent participating interest in the NEPL/NAOC/ OOL JV, we are indeed concerned that the entire purported assignment was executed without due compliance with the terms of JOA.

We expect that all parties to the JOA will comply and observe the terms of the JOA.