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Promoting Good Governance.

Nigeria to retain 40 per cent ownership in JV partnership with foreign oil companies

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THE Federal Government has directed the Nigerian National Petroleum Corporation, NNPC, its oil holding firm to cut down its stakes in Joint Venture oil assets to less than 40 per cent within the 2019 fiscal year by selling its stakes which would boost its finances.

In a tweet on the official Twitter handle of the Presidency, the Minister of Budget and National Planning, Udo Udoma, disclosed the government’s plan to reduce its stakes in the assets.

The NNPC currently holds shareholding interest in six joint ventures with foreign oil firms operating in Nigeria. Apart from the Joint Venture, with Shell Petroleum Development Company of Nigeria Limited which NNPC holds a 55 per cent stake, but holds a 60 per cent stake in the other joint ventures.

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The others 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.
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.

All parties share in the cost of operations. The operator is the one to prepare proposals for the programme of work and budget of joint expenditure on an annual basis, which shall be shared on a shareholding basis

The Economic Recovery and Growth Plan released in 2017, revealed that Nigeria was set to earn $115 million from giving up its stake in JV oil assets, refineries and other downstream subsidiaries such as pipelines and depots according to a report.

The ICIR had earlier reported that the outstanding cash call debt owed by the Federal Government in its JV operations with the foreign oil firms are worth $3.6 billion after paying off $1.5 billion.

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  1. Victor says

    Good morning ICIR.

    Good job you’re doing giving us good info, especially about the Government.

    I’m a big fan!

    Could you please investigate what the current Oil JV Articles of Association are and who will be buying the stakes the FG is giving up to, allegedly, increase revenue?

    I believe they owe us an explanation.

    Thank you for your help.