Despite the terms of the Petroleum Industry Act (PIA), stakeholders have voiced concern that the Federal Government's policy reversals, as demonstrated by the shares agreement between ExxonMobil and Seplat Energy, could harm Nigeria's oil reform.

ExxonMobil, a Delaware-based American company, had stated in February that it will sell all of its interests in Mobil Producing Nigeria Unlimited (MPNU) to Seplat Offshore Ltd., a division of Seplat Energy Nigeria, for $1.28 billion, subject to ministerial approval. 

However, in a letter to ExxonMobil, the Nigerian National Petroleum Company Limited (NNPCL) claimed that it wished to exercise a right of first refusal, a step that many experts in the field say is not appropriate for the divestiture of a participating interest in the Joint Operating Agreement. ExxonMobil was also taken before an Abuja Federal High Court by NNPC in an effort to stop the sale from being completed. 

While serving as the Minister of Petroleum Resources, President Buhari recently defied both the NNPC and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) by approving the sale. However, he quickly changed his mind after the NUPRC countermanded his consent.

In its analysis of the situation, Bloomberg noted that the Buhari administration was attempting to reverse declining production and attract significant investment into the sector that accounts for more than 90% of export revenues, and it cautioned that the inconsistency in the ExxonMobil-Seplat deal "could discourage investment in Africa's largest oil producer in the wake of industry reform intended to grow the sector."

The New York-based media conglomerate stated that experts believed the most recent development portends a bleak future for the oil reform while acknowledging that "the deal would have been the first major transaction to be announced since Nigeria passed sweeping legislation aimed at bolstering oil and gas investments after two decades of uncertainty." 

According to the article, Mariam Olabode, an oil and gas analyst at Lagos-based Afrinvest West Africa, is concerned that investors who bought Seplat's shares after Buhari approved the deal will now be concerned about how this ends due to the sudden reversal and contradictory signals from the same government.

"Investors continue to be concerned about the issue of oil theft, vandalism, and insecurity along the pipelines. Now we have this acquisition dispute," Olabode was quoted as saying in the article. 

According to Bloomberg, Gail Anderson, a research director at UK-based Wood Mackenzie, voiced worry that "perhaps worse is the public dispute between Nigeria's president and its oil regulator having "a knock-on effect" on other transactions that are waiting on the conclusion here." 

But it added that this wasn't the first time the Buhari administration had shown a lack of resolve on such important issues involving the oil and gas sector.

Earlier than usual last year, Addax Petroleum Corporation's petroleum permits were suspended, then reinstated. This year, they were suspended once more. 

"The country is unable to reach its agreed-upon OPEC quotas due to rampant crude theft and security concerns in the Niger River Delta, where the majority of the oil is produced. According to Bloomberg, oil giants are considering to sell off some of their holdings in the most populated nation in Africa. 

The article also included a warning from Ayodele Oni, a partner at the Lagos-based Bloomfield Law Practice, who stated that "the optics are not very good for the country, as oil majors may now look at their departure strategy before investing and possibly negotiate it from the start."