NUPRC Warns Companies against Buying Oil, Gas Assets without Due Diligence
Absolves self of liability
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has advised prospective buyers of oil and gas assets put on sale during bid rounds to endeavour to carry out proper due diligence checks on the commercial and economic viability of the assets before making payments.
The commission also absolved itself of any responsibility for the commercial decision made by a company to invest in an asset on the basis of the buyer's analysis of the information made available to it before bidding and paying for the asset.
NUPRC gave the advice in a letter sent to THISDAY in response to an enquiry regarding a complaint by Folstaj International Limited, the awardee of the Udibe marginal field.
Folstaj had claimed that the actual volume of hydrocarbon in the field allocated to it by the regulator was far below what was in the dataset given to it by the commission.
Managing Director of Folstaj, Mr. Tajudeen Yahaya, had during an interaction with THISDAY, stated that the company was still trying to resolve the discrepancy in the reserve volume quoted in the dataset handed to it by the regulator upon which they paid the signature bonus.
But in an email response sent to THISDAY by the Head, Public Affairs and Corporate Communications, NUPRC, Mrs. Olaide Shonola, the commission insisted that fields on offer in the 2021 Marginal field bid round was offered on the basis of well-known contractual principles.
It argued that all prospective bidders were expected to have carried out proper due diligence and commercial analysis of the data available before making a decision to buy any of the assets on offer following an award.