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NNPC to review PSC fiscal terms with IOCs

By on September 17, 2015

The Nigerian National Petroleum Corporation (NNPC) yesterday disclosed that it would revisit the fiscal terms of existing Production Sharing Contracts (PSCs) entered into by it on behalf of Nigeria with some international oil companies (IOCs).

The corporation, in a statement from its Group General Manager Public Affairs, Ohi Alegbe, explained that the imminent review was aimed at seeking favourable benefits to Nigeria based on prevailing realities in the oil industry.

The statement quoted the Group Managing Director of the corporation, Dr. Ibe Kachikwu, to have made the disclosure when he spoke at the France-Nigeria business forum organised to mark the visit of President Muhammadu Buhari to France.
Kachikwu, according to the statement, disclosed that in the weeks and months ahead, the corporation would be re-negotiating the PSC contracts to extract as much benefit as possible for Nigeria.

He noted that though the PSC agreements are firm contracts which should be adhered to, the NNPC is allowed to make use of the window which creates space for re-negotiation.
“We intend to begin the process of the re-negotiation of the PSCs to see what value chain and improvements we can have from these contracts.

“Some of the contracts were negotiated over 20 years ago and they have since been overtaken by new realities in the industry,” Kachikwu said.

He however explained that in carrying out a review of the existing PSCs, care must be taken not to create an anti-investment atmosphere as that may be counter-productive to the industry.

Kachikwu also spoke on the status of France-Nigeria relations in the oil and gas industry, saying though the French have a firm presence in the Nigerian petroleum industry, there is still room for French companies to improve their presence in the refining areas where Nigeria currently needs support.

On this, he said: “There is no country in Africa that has the kind of resource base Nigeria has, So, France really needs to get more bullish if it wants to compete in Nigeria with the very aggressive India, China, Germany … It’s a huge competition and I am looking forward to better days ahead.”

The NNPC boss equally stated on the ongoing reforms of Nigeria’s oil and gas industry, that the global oil and gas community was showing unmatched excitement about the re-invigoration of the industry.

According to him, “There is a lot of interest in our quest to seek joint ventures across the value chain; there are huge potentials across board and all we need to do is to galvanise the efforts to get the best out of it.”

Kachikwu noted that President Buhari’s vision for the industry was absolutely on track, adding that: “It is being honed every day; there is focus, transparency and diversified income streams.”

 

[ThisDay]