The minister of budget and national planning, Udoma Udo Udoma, has said that the federal government will sell some of its stakes in joint ventures with Shell and Chevron to improve its finances.
At present, the Nigerian National Petroleum Corporation (NNPC) operates six joint ventures with foreign oil companies. They include Nigerian Agip Oil Company Limited, Mobil Producing Nigeria Unlimited, Texaco Overseas Petroleum Company of Nigeria Unlimited, Elf Petroleum Nigeria Limited and Chevron Nigeria Limited (CNL) where it holds 60% stake in each.
It, however, holds a 55% stake in the joint venture with Shell Petroleum Development Company of Nigeria Limited.
In the Economic Recovery and Growth Plan which was drafted to put the economy on a growth path after the 2016 recession had included restructuring federal government’s stake in JIV oil assets, refineries and downstream facilities like depots and pipelines.
The Debt Management Office (DMO) had also said the government was looking to raise N710 billion from restructuring its equity in JV oil assets.
Reuters reports that Udoma told members of the national assembly during a presentation that the government will intensify efforts to improve its finances including the “immediate commencement of the restructuring of the joint venture oil assets so as to reduce government shareholding to 40%”.
The minister also said President Muhammadu Buhari wants the oil restructuring completed in 2019. According to the joint venture agreement, one of the parties is designated as the operator.
All parties share in the cost of operations. The operator is the one to prepare proposals for the programme of work and budget of expenditure joint on an annual basis, which shall be shared on a shareholding basis