Nigeria plans to cut its stake in joint oil ventures with multinational oil companies to 40 percent this year, its budget minister said, as the country seeks to boost revenue to grow an economy recovering from recession. Oil companies including Royal Dutch Shell, Chevron and ExxonMobil, operate in Nigeria through joint ventures with the state-owned NNPC.
NNPC owns 55 percent stake in its joint venture with Shell and 60 percent stakes with others. The government has considered reducing its majority stakes in these joint ventures for more than a decade but was under little pressure as higher oil prices boosted state coffers. Budgets under Muhammadu Buhari, who starts a second term in May, have been Nigeria’s largest ever and the government has been seeking to boost revenue after it emerged from a 2016 recession two years ago.
Budget Minister, Udoma Udo Udoma, said 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 percent,” he said in a statement.
He added during a presentation to lawmakers that Buhari wanted the oil restructuring completed this year. Buhari won re-election last month for another four years, defeating his pro-business rival Atiku Abubakar, who had touted selling the state-owned NNPC as one of his key reform policy. In 2017, the debt office said the government wanted to raise 710 billion naira ($2.32 billion) via restructuring its equity in joint venture oil assets and that it had captured the proposals in the 2018 budget.
In the past, Nigeria has held talks with oil companies regarding financing agreements for joint ventures after it struggled to fund its portion of such partnerships through cash calls which have often been delayed in parliament. The government has asked the petroleum regulator to collect past-due oil license charges and royalties, within three months. The country has also ordered oil majors to pay nearly $20 billion in taxes it says are owed to local states. Buhari has presented an 8.83 trillion naira budget for 2019, laying out plans to drive growth. He has directed NNPC to take measures to achieve the targeted oil production of 2.3 million barrels per day this year, the minister said. ($1 = 306.3000 naira). Reuters
