Economy
NNPC Raises Concerns Over Oando-Eni Acquisition Deal
By Adedapo Adesanya
The reported deal between Oando Plc and Italian giant, Eni, may hit a regulatory hurdle as the Nigerian National Petroleum Company Limited (NNPCL) said it is yet to confirm the authenticity of the agreement for the acquisition of Nigerian Agip Oil Company Limited (NAOC) assets.
This was contained in a letter reference E&P/MD/0523 dated September 4, addressed to the Managing Director, Nigerian Agip Oil Company Limited, and signed by the Managing Director, NNPC Exploration and Production Limited (NEPL), Mr Ali Zarah.
The NNPC letter reads: “Our attention has been drawn to various reports circulating on different media platforms in relation to an alleged divestment of NAOC’s participating interest in OMLs 60, 61, 62 and 63 to Oando Oil Limited (OOL).
“A duly signed press statement allegedly emanating from OOL dated 4 September 2023 affirms the fact that NAOC has assigned its entire twenty (20) per cent participating interest in the said OMLs to OOL.
“Whilst we are yet to confirm the authenticity of the said divestment, we would like to note that the purported assignment, 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 the NAOC/NEPL/OOL Joint Venture.”
The letter explained that clause 19.1.1 of the J0A provides that “No party may assign or transfer its interest or any part thereof without the prior written consent of the other parties, which consent shall not be unreasonably withheld.”
By virtue of this provision, it said, a party seeking to transfer part or the whole of its participating interest in the Joint Venture is obligated to seek the prior written consent of the other parties.
In this instance, it said, NAOC did not inform NEPL of any proposed assignment of its participating interest to OOL or any other party neither did NAOC seek and obtain the mandatory pre-divestment written consent and approval from NEPL in accordance with Clause 19.1.1. of the JOA.
“It is imperative for you to note that failure to obtain NEPL’S prior written consent and approval with regard to the alleged transfer of your interests in the joint assets constitutes a grave breach of the terms of the JOA and NEPL reserves its rights in relation to the said breach-including NEPL’s entitlement to invalidate the purported assignment to OOL,” it said.
It noted that under the terms of the JOA, assignment of interest has implications on the transfer of operatorship.
“Clause 24.1(i)(c) of the JOA provides that the operator shall cease to be the operator and shall be removed by the Non-operators if the operator assigns or otherwise disposes of, other than to an affiliate, all its participating interest.”
Furthermore, it said, Clause 2.6.1 provides that in the event of cessation of operatorship arising from the above circumstance, the parties shall appoint one of the Non-operators as successor operator.
“We have highlighted the above provisions of the JOA to underscore the point that the purported assignment, even if valid should by no means translate to transfer of operatorship to OOL If NAOCs divestment turns out to be valid, it will become incumbent on NEPL and OOL to decide on a successor operator.
“Please note that as holders of sixty (60) per cent 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 the JOA.
“We expect that all parties to the JOA will observe and comply with the terms of the JOA.
“In view of the foregoing, we request NAOC’s confirmation to NEPL the authenticity or otherwise of the reported divestment to enable us to determine our next steps with regard to the management/operations of the assets,” the letter reads.
Business Post had reported that the agreement between companies is expected to clear the way for Oando to acquire 100 per cent of the shares of NAOC, which has interests in four onshore blocks and two onshore exploration leases in the country.
By Adedapo Adesanya
Six price gainers helped the NASD Over-the-Counter (OTC) Securities Exchange retain its stay in green territory after a 0.23 per cent appreciation on Thursday, February 26.
The price gainers were led by Nipco Plc, which added N25.00 to close at N278.00 per share compared with the previous day’s N253.00 per share, NASD Plc rose by N5.13 to N56.41 per unit versus N51.28 per unit, FrieslandCampina Wamco Nigeria Plc expanded by N2.24 to N102.44 per share from N100.00 per share, Afriland Properties Plc grew by 88 Kobo to N18.88 per unit from N18.00 per unit, 11 Plc increased by 35 Kobo to N277.00 per share from N276.65 per share, and Lagos Building Investment Company (LBIC) Plc gained 27 Kobo to close at N3.75 per unit versus N3.48 per unit.
On the flip side, Central Securities Clearing System (CSCS) Plc lost N1.75 to sell at N68.25 per share versus N70.00 per share, and Geo-Fluids Plc depreciated by 2 Kobo to N3.25 per unit from N3.27 per unit.
The weight of the advancers fortified the NASD Unlisted Security Index (NSI) by 9.21 points to 4,034.46 points from 4,025.25 points, and the market capitalisation soared by N5.51 billion to N2.413 trillion from Wednesday’s N2.408 trillion.
Yesterday, the transaction value jumped by 18.8 per cent to N102.8 million from N80.7 million, and the number of deals surged by 18,8 per cent to 38 deals from 32 deals, while the transaction volume went down by 84.9 per cent to 1.3 million units from 8.7 million units.
At the close of business, CSCS Plc was the most traded stock by value (year-to-date) with 34.2 million units worth N2.04 billion, followed by Okitipupa Plc with 6.3 million units sold for N1.1 billion, and Geo-Fluids Plc with 122.1 million units valued at N478.2 million.
Resourcery Plc remained as the most traded stock by volume (year-to-date) with 1.05 billion units exchanged for N408.7 million, trailed by Geo-Fluids Plc with 122.1 million worth N478.2 million, and CSCS Plc with 34.2 million units traded for N2.04 billion.
By Adedapo Adesanya
The Naira further weakened against the Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) for the fourth straight session this week on Thursday, February 26.
At the official market yesterday, the Nigerian Naira lost N3.71 or 0.27 per cent to trade at N1,359.82/$1 compared with the previous session’s N1,356.11/$1.
In the same vein, the local currency depreciated against the Pound Sterling in the same market window on Thursday by N8.27 to close at N1,843.23/£1 versus Wednesday’s closing price of N1,834.96/£1, and against the Euro, it crashed by N8.30 to quote at N1,606.89/€1, in contrast to the midweek’s closing price of N1,598.59/€1.
But at the GTBank forex desk, the exchange rate of the Naira to the Dollar remained unchanged at N1,367/$1, and also at the parallel market, it maintained stability at N1,365/$1.
The continuation of the decline of the Nigerian currency is attributed to a surge in foreign payments that have outpaced the available Dollars in the FX market.
In a move to address the ongoing shortfall at the official window, the Central Bank of Nigeria (CBN) intervened by selling $100 million to banks and dealers on Tuesday.
However, the FX support failed to reverse the trend, though analysts see no cause for alarm, given that the authority recently mopped up foreign currency to achieve balance and it is still within the expected trading range of N1,350 and N1,450/$1.
As for the cryptocurrency market, major tokens posted losses over the last 24 hours as traders continued to de-risk alongside equities following Nvidia’s earnings-driven pullback, with Ripple (XRP) down by 2.7 per cent to $1.40, and Dogecoin (DOGE) down by 1.6 per cent to $0.0098.
Further, Litecoin (LTC) declined by 1.3 per cent to $55.87, Ethereum (ETH) slipped by 0.9 per cent to $2,036.89, Bitcoin (BTC) tumbled by 0.7 per cent to $67,708.21, Cardano (ADA) slumped by 0.6 per cent to $0.2924, and Solana (SOL) depreciated by 0.4 per cent to $87.22, while Binance Coin (BNB) gained 0.4 per cent to sell for $629.95, with the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closing flat at $1.00 each.
By Adedapo Adesanya
Crude oil settled lower on Thursday as investors tracked developments in talks between the United States and Iran over the latter’s nuclear programme, weighing potential supply concerns if hostilities escalate.
Brent crude futures lost 10 cents or 0.14 per cent to close at $70.75 a barrel, while the US West Texas Intermediate (WTI) crude futures depreciated by 21 cents or 0.32 per cent to $65.21 a barrel.
The US and Iran held indirect talks in Geneva on Thursday over their long-running nuclear dispute to avert a conflict after US President Donald Trump ordered a military build-up in the region.
Prices had gained earlier in the session after media reports indicated the talks had stalled over US insistence on zero enrichment of uranium by Iran, as well as a demand for the delivery of all 60 per cent-enriched uranium to the US.
However, prices then retreated after the two countries extended talks into next week, reducing the immediate strike potential.
Iran’s Foreign Minister, who confirmed talks will continue next week, said Thursday’s talks were the most serious exchanges with the US yet, saying Iran clearly laid out its demand for lifting sanctions and the process for relief.
His counterpart from Oman, who is handling the talks, said significant progress was made in Thursday’s talks. The Omani minister’s upbeat assessment followed indirect talks between Iranian Foreign Minister and US envoys Steve Witkoff and Jared Kushner in Geneva, with one session in the morning and the second in the afternoon.
He will also hold talks with US Vice President JD Vance and other US officials in Washington on Friday.
The Trump administration has insisted that Iran’s ballistic missile program and its support for armed groups in the region must be part of the negotiations.
The American President said on February 19 that Iran must make a deal in 10 to 15 days, warning that “really bad things” would otherwise happen.
On Tuesday, he briefly laid out his case for a possible attack on Iran in his State of the Union speech, underlining that while he preferred a diplomatic solution, he would not allow Iran to obtain a nuclear weapon.
Meanwhile, the US continues to amass forces in the Middle Eastern region, with the military saying it is prepared to execute orders given by the US President.
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