Spokesman for NNPCL said the company is not averse to selling Agip shares to Oando.

The Nigerian National Petroleum business Limited (NNPCL) has stated that it is not opposed to the sale of shares by Nigerian Agip Oil Company Limited (NAOC) to an indigenous oil business, Oando Oil Limited.

The clarification came a day after its subsidiary, NNPC E & P Limited, made public a letter raising concerns over the sale of shares.

The letter, signed by NEPL Managing Director Ali Zarah, urged the corporation to follow appropriate process in order to avoid future litigation.

Zarah claimed that the purported assignment of NAOC’s participation interest in OMLs 60, 61, 62, and 63 to Oando Oil would have far-reaching contractual/legal ramifications in connection to the Joint Operating Agreement (JOA) regulating the NAOC/NEPL/OOL Joint Venture, which was signed in July 1991.

“Clause 19.11 of the J0A specifies that “no party may assign or transfer its interest or any portion thereof without the previous written consent of the other Parties, which consent shall not be unreasonably withheld,” he said.

“By virtue of this provision, a Party wishing to transfer a portion or the entirety of its participating interest in the Joint Venture is required to obtain the prior written consent of the other parties.” In this case, NAOc failed to notify NEPL of any proposed assignment of its participating interest to OOL or any other party, nor did NAOC seek and secure the obligatory pre-divestment written consent and approval from NEPL as required by Clause 19.1.1 of the JOA.

“It is critical that you understand that failing to obtain NEPL’s prior written consent and approval with regard to the alleged transfer of your interests in the joint assets constitutes a serious breach of the terms of theJOA, and NEPL reserves its rights in relation to the said breach, including the right to invalidate the purported assignment to OOL.”

However, NNPC Chief Corporate Communications Officer GarbaDeen Muhammad stated yesterday that the national oil firm was not opposed to the purchase.

“It has come to our attention that a routine communication in the form of a letter written by NNPC E&P Limited (NEPL) to its JV Partner, Nigerian Agip Oil Company Limited is being interpreted as NNPC Ltd opposing the sale of NAOC shares to Oando PLC,” he added. This is not the case.

“NNPC Ltd. wishes to state that the letter was sent by NEPL, a subsidiary of NNPC Ltd.” However, there was no mention of any opposition or objection to the transaction in the letter. NEPL is just drawing attention to some key provisions of the Joint Operating Agreement between it, NAOC, and OOL that may have been overlooked inadvertently. “Those clauses will protect the transaction both now and in the future,” he stated.