In the bid to boost revenue to grow an economy recovering from recession, Nigeria’s budget minister, Udoma Udo Udoma said the country plans to cut its stake in joint oil ventures with multinational oil companies to 40 percent this year.
Oil companies including Royal Dutch Shell, Chevron and ExxonMobil, operate in Nigeria through joint ventures with the state-owned NNPC, which owns 55 percent stake in its joint venture with Shell and 60 percent stakes with others.
The Nigerian 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.
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 noted during a presentation to lawmakers that Buhari wanted the oil restructuring completed this year.
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.
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. Nigeria has also ordered oil majors to pay nearly $20 billion in taxes it says are owed to local states.