Nigeria's oil regulator says Mobil deal rejection based on PIA

Nigeria's oil regulator has recently made a controversial decision to counter and maintain the status quo on the asset acquisition of Mobil Producing Nigeria by Seplat Energy. This decision was based on the provisions of the Petroleum Industry Act, causing confusion and concern within the industry. The move comes after President Muhammadu Buhari consented to the acquisition as the Minister of Petroleum. Femi Oladehin, a Partner at Argentil Capital Partners, has voiced his opinion on this development, criticizing the lack of clarity and coordination in the government's decision-making process. The conflicting signals being sent to investors have raised questions about Nigeria's attractiveness as an investment destination in the oil and gas sector. Oladehin expressed his views during an interview on CNBC Africa, highlighting the implications of the regulator's actions on investor confidence. He condemned the regulator's decision to challenge the President's approval of the transaction, stating that it sends a negative signal to potential investors. The lack of clarity and coordination in this case has not only created uncertainty for ongoing transactions but also raised concerns about the overall investment environment in Nigeria. The Petroleum Industry Act clearly outlines the roles and powers of different entities within the industry. The Minister of Petroleum has the authority to approve transactions in the downstream space, and the President holds overriding powers that can be exercised in the national interest. Oladehin emphasized that the regulator's interference in this transaction undermines the regulatory framework and sets a dangerous precedent for future investments. The controversy surrounding the Mobil deal has also sparked legal issues, with domestic governments raising complaints and initiating litigation against the acquisition. Despite these challenges, Oladehin stressed the importance of separating legal disputes from regulatory approval processes. He argued that third-party interventions in transactions could hinder the approval process and disrupt business operations. Addressing legal issues should not obstruct legitimate transactions that have met the necessary benchmarks for approval. Oladehin highlighted the economic significance of the oil and gas industry in Nigeria, emphasizing the need for regulatory stability to attract much-needed investment. The sector has been plagued by low levels of investment and production due to regulatory uncertainties and security challenges. The recent decision by the regulator to counter the acquisition approval further complicates the investment landscape and raises doubts about the government's commitment to fostering a conducive business environment. In light of these developments, Oladehin called for accountability and transparency in regulatory decision-making. He suggested that the regulator's actions should have consequences, such as the resignation of the board members involved in the controversial decision. Oladehin underscored the importance of upholding the rule of law and respecting the President's authority in approving transactions, warning that such actions could deter prospective investors from engaging with Nigeria. The ongoing confusion and conflict between regulatory bodies and government agencies underscore the pressing need for clarity and consistency in Nigeria's regulatory environment. As the country strives to attract foreign investment and revitalize its oil and gas sector, regulatory missteps and power struggles could undermine these efforts. The Mobil deal saga serves as a cautionary tale for investors evaluating Nigeria's business climate, highlighting the challenges and risks associated with navigating complex regulatory landscapes. Moving forward, stakeholders in the oil and gas industry will be closely monitoring how the government addresses this issue and whether corrective measures are taken to restore investor confidence. The resolution of the Mobil deal saga will likely have far-reaching implications for Nigeria's reputation as an investment destination and its ability to compete in the global energy market.