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Seplat eyes NNPC stakes in oil, gas JVs

By on June 24, 2015

The Chairman, Seplat Petroleum Development Plc, Mr. Ambrosie Orjiako, has lent his voice to the growing calls on the Federal Government to sell its stakes in oil and gas joint ventures, adding that his company would be interested in buying, especially in the gas sector.

The Federal Government, through the Nigerian National Petroleum Corporation, owns between 55 per cent and 60 per cent in JVs with oil companies, including Shell, ExxonMobil, Chevron, Total and Eni, and the ventures are jointly funded.

But over the years, the NNPC has been unable to meet its share of funding, commonly referred to as cash calls, for the JV operations.

Selling the stakes will help the government to focus on areas like tax collection, while strong private sector involvement in the industry will help spur economic growth, Orjiako told Reuters on Monday.

He said on the sidelines of an investment conference, “Collect tax and focus on making sure that the industry grows, and when the industry grows it will create jobs … and do something for the government.

“And the best way is to not necessarily hold massive working interests in the JVs.”

He added that Seplat would be interested in picking up some of the stakes, especially in the gas sector, if the terms were right.

Seplat is focusing heavily on gas investment, drilling and acquisitions, aiming to increase gross output from around 120 million standard cubic feet per day to 400 million scf by 2017.

Orjiako added that the new government should scrap fuel subsidies and do more to diversify the economy.

“Subsidy removal should happen now. The reality is that the subsidy is not trickling down effectively…what we expect the government to do is to take a bold step…demonstrate good governance, invest in infrastructure and justify the taxes,” he explained.

President Muhammadu Buhari’s predecessor, Goodluck Jonathan, tried early in office to scrap subsidies, but the move met an angry reaction and led to eight days of nationwide strikes.

 

[Punch]