The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has emphasized that under the 2021 Petroleum Industry Act (PIA), the transfer of ownership of oil and gas assets within Nigeria necessitates the Minister’s consent.
Gbenga Komlafe, Chief Executive of the NUPRC, clarified this legal requirement in response to recent social media discussions surrounding the transfer of assets from international oil companies to indigenous firms, as stated in a Saturday press release.
He said, “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 (together the “Applicable Laws”).
“Under Nigerian law, while the entering into of a Sale and Purchase Agreement (SPA) between an assignor and an assignee constitutes an agreement to sell the relevant license or lease in accordance with the terms of the SPA, the transfer can only be consummated upon the grant Of Ministerial Consent,” he added.
In addition, Komolafe said that the Commission would conduct a careful and comprehensive analysis of the transaction before recommending to the Minister that Ministerial Consent be granted for the transfer of a license or lease.
He said that this process will determine the technical and financial competence of the acquirers, their adherence to environmental, social, and corporate governance sustainability, and their commitment to meeting decommissioning and abandonment commitments.
According to him, the assessment would also ensure adherence to the host community obligations, industrial and labor relations frameworks, and the lack of any legal obstacles preventing the transaction from being completed.