Under new leadership following the election of President Muhammadu
Buhari, Nigeria’s state-owned National Petroleum Corporation has
announced controversial plans to renegotiate production-sharing
agreement with oil majors. Companies such as Royal Dutch Shell, Chevron,
Eni and ExxonMobil could be affected in the coming weeks.
As reported by The Financial Times, western oil executives have
warned Nigeria against sweeping changes to commercial contracts that
could lead to the government taking a bigger share of revenues from the
country’s vast deepwater fields.
Several western industry executives said they knew nothing of the
details, others that they had not been contacted, and one, who declined
to be named, said: “Don’t mess with the fiscal terms.”
In an interview with The Financial Times, Stephane Foucaud, analyst
at First Energy Capital, said: “If the PSCs [production-sharing
contracts] start changing, that might seriously make people rethink
their investment exposure to Nigeria. Companies don’t like uncertainty.
In the context of the majors cutting capital spending, there are many
more opportunities for capital deployment.”
“With oil prices being about half what they were a year ago, there is
less capital to go around. I think Nigeria is focused in the right
place. Let’s make sure we have a stable environment, so when we do have a
project that is competitive, those funds go to those projects,” one
executive was quoted as saying by The Financial Times.
The newspaper also quoted Osagie Okunbor, chairman of Shell Nigeria,
who said neither Nigeria nor the international oil groups wanted the
negotiations “to have an adverse impact on investment in the country”.
He added: “We’ll have to look at several clauses and then take a
position.”
Shell has deferred until next year a final investment decision on its
multibillion-dollar Bonga South West project in light of the oil price
collapse.
http://neurope.eu/article/nigeria-slipping-into-oil-controversy/