FG to reduce stakes in JV oil assets to 40% – TheNigerialawyer

The Federal Government will reduce its stakes in joint venture
oil assets to 40 per cent in the 2019 fiscal year, budget documents
released on Tuesday showed, according to Reuters.

The Minister of Budget and National Planning, Senator Udo Udoma,
disclosed in March government’s plan to reduce its stakes in the
assets.

The President Muhammadu Buhari-led administration had in its
Economic Recovery and Growth Plan released in 2017, said it would
reduce its stakes in JV oil assets, refineries and other downstream
subsidiaries such as pipelines and depots.

Oil companies including Royal Dutch Shell, Chevron and
ExxonMobil, operate in Nigeria through JVs with the Nigerian
National Petroleum Corporation.

The NNPC owns 55 per cent stake in its JV with Shell and 60 per
cent 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.

The PUNCH on March 25, 2019, that cash call payment for the
development of joint venture oil and gas assets ate into the
Federal Government’s revenue last year as a total of N1.829tn was
paid, according to the Nigerian National Petroleum Corporation,
which represents the government in the JVs.

Under the JV arrangement, both the NNPC and private operators
contribute to the funding of operations in the proportion of their
equity holdings and generally receive the produced crude oil in the
same ratio.

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