FG to sell stakes in JVs to improve finances | Nairalaw

Udoma Udo Udoma, the minister of budget and national planning,
says 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