All posts tagged farm in-farm out

By Adeniyi Adeoloye

Upstream asset divestment by International Oil Companies (IOCs) in Nigeria is now a norm.

But what about the time between the familiar phrase “the transaction is subject to obtaining all required regulatory approvals” in divestment announcements and when the approval is actually granted?

“The transaction is subject to obtaining all required regulatory approvals” is more than a routine caveat – it is a substantive regulatory condition for the transfer of interests. Approval requires the transaction to be assessed against the buyer’s technical and financial capacity, the asset’s end of life obligations, the agreement of the parties, and other relevant considerations. Yet recent IOC divestments show that the process behind this condition can be uncertain, with timelines extending well beyond those anticipated at the point of the announcement.

“The real litmus test of the implementation of the regulatory divestment framework would be the ongoing NNPC Ltd Project Delta divestment, where the legal frameworks can be tested against its own promises of predictability vis-à-vis established timelines, procedural steps, the due diligence elements, and even the deemed approval clause. Expectedly, the complexity of individual transactions will differ, and the time it takes parties to furnish NUPRC with updated or additional information will vary, as such, some reviews might extend beyond the established timelines. But this is precisely where NUPRC may rethink its current communication approach around transaction approvals. “

As upstream divestment by the IOCs intensified in the first five years of the 2020s, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has had to build on the legal foundation established by the Petroleum Industry Act 2021 (PIA) for the transfer of interests in upstream assets. This foundation is been operationalised through the Nigeria Upstream Petroleum (Assignment of Interest) Regulations, 2024, and NUPRC’s seven pillar regulatory divestment framework.

Section 95 of the PIA establishes the statutory basis for upstream asset transfer. The section prohibits the transfer of interest by a party to another without approval. The section establishes that the first step after submission of an application for approval by a party is for NUPRC to evaluate and recommend the application to the minister of petroleum for ministerial consent. The expectation of section 95 is for NUPRC to make the recommendation within 60 days and another 60 days for ministerial approval consideration. Notwithstanding these timelines, approval is not a given. Section 95 of the PIA also establish deemed consent as section 95(7b) states that where “no response on the application has been received within 60 working days from the receipt of the recommendation of the Commission, the consent of the Minister … shall be deemed to have been granted”.

The Nigeria Upstream Petroleum (Assignment of Interest) Regulations 2024 further provides procedural guidance for implementing section 95 of the PIA. It highlights details for asset transfer, including mandatory eligibility stage before commercial negotiation. The regulation requires the holder of the asset to inform NUPRC of the transaction and the candidates it has penciled down for the ownership transfer after technical evaluation. Under this regulation, NUPRC is obligated to, within 15 working days of receiving the shortlisted candidates to inform the asset owner of the candidates deemed acceptable to the federal government. Bypassing this stage and going ahead to commercial negotiation is considered by NUPRC that the transaction has “failed the eligibility criteria for the grant of consent by the Minister”.

The regulation establish that NUPRC will undertake “due diligence on application for transaction at any stage of such transaction before making any recommendation to the Minister in respect of the application”. The due diligence include “technical capacity, financial capacity, legal requirements, decommissioning and abandonment, host community trust and environmental remediation fund arrangements, industrial relations and labour related issues; and data repatriation”. The regulation also sets out what happens when the due diligence checks are not met or met, and maintains the same timeline as section 95 of the PIA.

The NUPRC regulatory divestment framework outlines the substantive elements that regulatory approval assessment is based on. It covers technical capacity, financial capacity, legal requirements, decommissioning and abandonment, host community trust and environmental remediation, industrial relations and labour issues, and data repatriation. This framework offers clarity on what is assessed during a divestment regulatory approval.

Benchmarking recent divestment approval timelines against the statutory timeframes in the PIA and the Assignment of Interest regulation reveals approval cycles contrary from what the framework envisages. Seplat announced its acquisition of Mobil Producing Nigeria Unlimited assets in February 2022. Despite an initial presidential assent in August of the same year, followed by a regulatory veto from NUPRC, the transaction did not reach completion until December 2024. Almost three years from announcement to close. The acquisition of Shell Petroleum Development Company by the Renaissance consortium (ND Western, Aradel Energy, First E&P, Waltersmith Petroman, and Petrolin Group), followed a different trajectory. Announced in January 2024, and completed in March 2025, about 14 months to regulatory clearance. Italian ENI and Oando transaction stands out as the fastest of the three deals. First announced in September 2023, it received regulatory approval and closed by August 2024. Taking less than a year from announcement to completion. Notably, both the Seplat and Oando deal faced pre-emption right claims from NNPC Ltd, which added an extra layer to the approval process.

These transactions provide a useful context for assessing the regulatory approval journey of divestment transactions, but they cannot be treated as a direct test of the established regulatory framework. The Seplat and Oando transactions were already underway before the Assignment of Interest regulation was issued, while the NUPRC regulatory divestment framework emerged much later in the life of the three transactions. Instead, it can be inferred that the complexity and lessons learned from these transactions must have informed the development of the regulation and divestment framework.

The real litmus test would be the ongoing NNPC Ltd Project Delta divestment, where the legal frameworks can be tested against its own promises of predictability vis-à-vis established timelines, procedural steps, the due diligence elements, and even the deemed approval clause. Expectedly, the complexity of individual transactions will differ, and the time it takes parties to furnish NUPRC with updated or additional information will vary, as such, some reviews might extend beyond the established timelines. But this is precisely where NUPRC may rethink its current communication approach around transaction approvals.

While communications between NUPRC and transaction parties are generally private correspondence, formalizing periodic updates on the status and progress of a transaction could provide greater clarity to the parties involved. Such updates could indicate the stage reached in the regulatory approval process, outstanding matters, and the likely next steps. This in turn would give stakeholders and even the wider public a better sense of how a transaction is progressing and help reduce perceptions of regulatory inaction.

It is equally important for NUPRC to clarify whether the 60 days regulatory clock pauses or restarts upon request of additional information from the parties to the transaction. The language in section 8(4) of the Assignment of Interest Regulation – “The regularisation of an existing application or an amendment thereto or submission of a new application, shall be deemed to be an application for consent under Regulations” is consequential. The implication of this is that every amendment or regularisation is considered as a fresh application, effectively restarting the 60 days timeline. While it is understandable that this approach ensures that NUPRC evaluates a complete application, it also means that the statutory window can extend well beyond what the framework envisages. A clearer distinction between minor updates or substantial amendments required to establish application completeness, or to undertake due diligence, and how each affects the regulatory clock would be reasonable. This would prevent unnecessary timeline resets and help keep approval periods well within the established window.

Publication of aggregated data on divestment transactions that have undergone regulatory approval, including: review durations relative to established legal timelines, instances where applications were deemed incomplete, the frequency of additional information requests, and the number of regulatory clock restarts would enhance predictability by giving transacting companies clearer data to benchmark their expectations. Because this sort of disclosure is process focused, it would not compromise proprietary or commercially sensitive information.

“The regulation requires the holder of the asset to inform NUPRC of the transaction and the candidates it has penciled down for the ownership transfer after technical evaluation. Under this regulation, NUPRC is obligated to, within 15 working days of receiving the shortlisted candidates to inform the asset owner of the candidates deemed acceptable to the federal government. Bypassing this stage and going ahead to commercial negotiation is considered by NUPRC that the transaction has “failed the eligibility criteria for the grant of consent by the Minister”.

Divestment approval is a consequential element of Nigeria’s petroleum governance framework, with real implications for indigenous capacity building, oil and gas production outcomes, employment, taxes and other revenues accruable to the government. As such, NUPRC must close the gap in its framework to reduce uncertainty around approval timelines for future divestment transactions. This aligns with the position of Mrs. Eyesan Oritsemeyiwa, NUPRC’s Chief Executive, who noted in her inaugural address to the industry that “execution and implementation – predictable regulation, faster decisions, stronger governance, and measurable outcomes that restore confidence, unlock investment, and maximize value for Nigerians and investors” is what the industry should expect following the legal foundation provided by the PIA.

Adeniyi Adeoloye, a petroleum geoscientist based in Calgary, is in a postgraduate course on Energy Management at the University of Calgary. An editorial associate at Africa Oil+Gas Report, Adeoloye writes from time to time for this platform and can be reached at adeniyi@africaoilgasreport.com.

Panoro Energy has entered into a definitive agreement with DNO ASA to acquire the entire share capital of DNO’s wholly owned subsidiary DNO CI LLC, which holds an indirect 9.09% interest in the gas producing Block CI-27 offshore Côte d’Ivoire.

The purchase is being made for a consideration of $80Million on a cash free / debt free basis, with effective date at January 1, 2025.

“No regulatory approvals are pending or required and there are no pre-emptive rights for the acquisition that is expected to complete between September and December 2026”, the company declared in a statement.

The 9.09% interest amounted to 3,287Barrels of Oil Equivalent Per Day (BOEPD) during FY 2025 and 3,334BOEPD during H1 2026.

Block CI-27 is operated by Foxtrot International LDC. The fields include Foxtrot, Mahi, Marlin, and Manta.

Success of the transaction will accelerate Panoro’s pathway to achieving group (net) production of >20,000BOEPD, the company said.

This means that the deal will “increase pro forma group production by ~23% and group 2P reserves by ~11%”, Panoro explained in the statement.

Net 2P (Proved plus Probable) reserves at effective date of acquisition is 9.4Million barrels of oil equivalent (MMboe) with net 2C (Best Estimate of Contingent) resources being 5MMboe (14.4 MMboe 2P+2C).  Resource volumes in Block CI-27 are ~95% gas weighted.

Panoro Energy was incorporated and began operations in 2009 in Oslo, Norway. It holds a diverse portfolio of oil and gas production, development, and exploration assets in Equatorial Guinea (Offshore), Gabon (Offshore), South Africa (Offshore) and  Tunisia (Onshore and Offshore).

The value of Block CI-27 is largely tied to the country’s  robust, domestic gas market .

“Produced gas is sold into strong and growing local market for power generation with liquids sold to a local refinery.

“Gross production for FY 2025 was 195Milions tandard cubic feet per day ( MMscfd) of gas and 1,380BOPD liquids (~36,000BOEPD)

“Gas pricing is de-linked from oil price and sold under long term contracts with majority of gas used for power generation in Abidjan

“Low unit production cost at just $ 6/boe and accretive to Panoro on all standard metrics applied by industry”.

The transaction is to be financed through a combination of (i) equity, comprising the issuance of seven million new Panoro shares to DNO, and (ii) debt, comprising a fully placed $50Million senior unsecured bond issuance.

By Madison Okoromaiye, in Capetown

The Namibian government has approved TOTALEnergies’ deal to secure a 40% and operatorship of Galp Energia’s sprawling Mopane accumulation in the Orange basin.

The transaction is tied to Galp Energia accessing a 10% stake in TOTAL’s large Venus development.

Finalising these two -deals -in-one provides a clearer line of sight for TOTAL to take a Final Investment Decision (FID) on Venus, but the latter is still a work in progress.

Jean Pierre Sbraire, TOTAL’s  Chief Financial Officer, said at the  earnings call on July 2023, 2026  that the company had received the official approval of the Ministry of Energy of Namibia at the end of the week of July 13, 2026 for the farm ins. “And so we are just, in fact, finalizing the last paper to close the deal potentially tonight (July 23, 2026) or tomorrow (July 24, 2026).

“So, that’s important, of course,” Sbraire said, “because this fact that we are going to be on both developments as operator has a strong value for us in order to engage with the  FID of Venus, and I would say there are intense discussions as well, we have a joint target between the government of Namibia and the consortium to sanction it by end of July.

“There are discussions progressing, we’ll see if we can conclude in July or if we need to have a little more time.

“Technically, I think we have selected all contractors, so we are ready to take the FID subject to finalizing discussions with the government of Namibia”.

July 2026 timeline for Venus is not cast in stone.

“There have been some progress, but there’s still some progress to be done”, Sbraire noted.

“So again, generally it’s when the last minute you can conclude, but we’ll see if we can do it.

“I would say I’m reasonably optimistic that all the parties, there is a joint interest clearly, and in particular the Namibian authorities are fundamentally supportive to have a strong operator, being able to capitalize on synergies between the projects.

“I remind you that now that the Mopane has been approved and will be closed, the next step is to engage ….. to appraise Mopane.

“We have three wells in 2027, and the FID will be taken in 2028.

“So all that, as we engage in a strong momentum, and clearly for us, Namibia will begin, is becoming a very important hub for future growth, not only to 2030, but beyond 2030”.

The Angolan government has authorized the state hydrocarbon company to cede a large fraction of its equity in one of the country’s optimal producing assets to a privately owned, local independent.

Sonangol – Exploração e Produção, SA will transfer 17% of its own 30%, amounting to 5% of the entire shares of all participating interests in block 17/06, to the Falcon Oil holding company, part of the António Mosquito group.

Block 17/06, operated by TOTALEnergies, produced 38,000Barrels of Oil Per Day in May 2026.

Falcon’s 5% share in the block now grows to 10%.

The updated composition of equities in the block then becomes: TOTALEnergies EP Angola Block 17/06 (-30%); Sonangol – Exploração e Produção, SA (25%); SSI Seventeen Limited (27.5%); Falcon Oil Holding Angola, SA (10%); Etu Energias Bloco 17/06 (SU) (7.5%).

Falcon Oil  was founded by the Angola businessman António Mosquito in Panama in 1998. It currently holds a 20% stake in  Etu Energias operated Block 2/05, a shallow water producing block. It also holds a 10% stake in ExxonMobil -operated undeveloped, non-producing Block 33.

Falcon Oil was not always a top-notch participant in Angola’s E&P environment. The company was removed from three blocks: 18/06, 6/06 and 15/06 by the Ministry of Petroleum between 2014 and 2015, on account  of lack of proven suitability and financial capacity, after the group had accumulated debts  worth over $200Million with the State. “It was one of the most cited episodes on the financial fragility of Angola owned E&P companies in the face of the cost commitments of the contracting groups”, according to the Angolan economic and financial media outlet O Ponteiro. “Falcon Oil regained ground in the following years: in 2015, it was the (homegrown) oil company with the highest production growth in Angola, a jump of 3.207% from the previous year”.

According to the order signed by the Minister of Mineral Resources, Petroleum and Gas, Sonangol – Exploration and Production, SA notified its intention to transfer to Falcon Oil Holding Angola 5% (five percent) of the participating interest it holds in this concession to the national concessionaire, which did not wish to exercise its right of first refusal.

Panoro Energy’s recently completed acquisition of an additional 40.375% interest in Block G in Equatorial Guinea will increase the company’s overall share to 54.625% working interest production in the deepwater acreage located in the Rio Muni Basin.

The asset was acquired from Kosmos Energy, the US junior who is now left with only non-producing properties in the country.

“The event is transformational and highly accretive acquisition “, Panoro said of the  completion, which followed approvals from the  Communauté Économique et Monétaire de l’Afrique Centrale  (CEMAC) “and their mandatory anti-competition review which took approximately three months, and has been obtained in a record time well in advance of the six-month deadline”.

The acquisition positions Panoro as the largest independent E&P oil producer in Equatorial Guinea, where it sees scope for significant further organic and external growth.

But with the country’s overall crude oil output having been stuck at less than 55,000 Barrels of Oil Per Day (BOPD) in the last six months and Block G gross production contributing all of 20,500BOPD, the Norwegian player is merely becoming a larger fish in a small pond.

Panoro is counting the pennies and talking up the positive.

It says:

• After interim adjustments in Panoro’s favour of $53Million, the closing consideration paid by Panoro is $127Million versus $180Million announced.

• Panoro is due to lift a Block G cargo of ~546,000Barrels shortly in July 2026, of which ~404,000Barrels is attributed to the interest being acquired.

• At flat pricing of $90/bbl & $80/bbl Panoro expects to achieve payback on the acquisition within 18 months (@$80/bbl = 24 months) from completion date.

• At EG-23 Panoro is progressing work on the Estrella (gas) and Rodo (oil) discoveries for a coordinated initial appraisal and development project utilising existing nearby infrastructure. As per the 2025 AQSR Panoro has net 2C resource recognition of 26.3 MMboe.

• Panoro is on track to produce over 20,000BOPD (on a net basis) in 2027.