There have been what looks like a groundswell of criticisms against plans by the Nigerian National Petroleum Company Limited to expand its operations by exercising its pre-emption rights over some assets that are up for sale in the country.
But that the state-owned oil giant has opted to exercise its Right of First Refusal on the sale of the assets, shouldn’t be misconstrued.Although the NNPC has not officially spoken on the matter, a source close to the goings-on, listed three criteria for assets that may be reshaping the portfolio of the new NNPC.
With this, assets that have minimal vulnerability would be prioritised over assets that have higher vulnerability to security or production loss issues. Although some have argued that NNPC’s action could lead to a legal tussle between Seplat and the national oil company as the NNPC did not have the power to halt the acquisition of the multinational oil company’s shares by Seplat, the national oil company has the right under the law to take the action it took.
According to the letter, NNPC also reiterated that it had already transformed from being a corporation to being a profit-driven company, and it now had the capacity to buy over the share of ExxonMobil in the joint venture. Buhari signed the PIA into law on August 16, 2021, and following the assent of the president, the NNPC Limited was incorporated by the Corporate Affairs Commission on September 22, 2021, after it received an application for its registration from the federal government.
Clearly, from the foregoing, as a commercial entity, the NNPC Limited is striving to ensure that its stakes in the Joint Venture Contracts are not weakened if further shares are issued would continue to exercise its right of pre-emption. The NNPC strategy, Kyari said, also included investing in strategic assets to address integrity, bottlenecking, and growth issues in the oil industry, such as “rigless” activities and oil drilling campaigns.