New head of Nigeria's NNPC vows to review all oil deals to shore up revenue

admin publish 2015/8/19 14:18:56

The new managing director of state-owned Nigerian National Petroleum Corporation said the company will review all joint venture agreements and production sharing contracts to shore up revenue as the sharp drop in oil prices has hit the Nigerian economy hard.

Emmanuel Kachikwu said in a statement Sunday the deals would be "reviewed to reflect current-day realities in the global oil and gas industry."

He said the process would be in line with President Muhammadu Buhari's directive to improve the company's efficiency, transparency and profits.

NNPC has joint venture agreements with Shell, ExxonMobil, Chevron, Eni, and Total.

Under the deals, the partners share operational costs, and the foreign drillers pay taxes and royalties after lifting their share of crude.

Under PSCs, NNPC holds the concessions, and the outside drillers fund development of the mostly deepwater offshore blocks and recover their costs from the production after royalty payments.

NNPC has been unable to provide its average 57% share of the funding for joint venture projects, and the oil price slump has strained funding further.

Nigeria produces around 2 million b/d. Landmark energy legislation intended to review fiscal terms offered to foreign oil companies has stalled in parliament.

Kachikwu, a former ExxonMobil executive, said the NNPC under his watch would plug all revenue leaks and make sure that all due revenue is remitted.

NNPC has been accused of failing to remit oil and gas revenues into the government treasury, leading to allegations of disappearance of billions of dollars in oil revenue.