The Nigerian National Petroleum Corporation says it is set to revisit the fiscal terms of the existing Production Sharing Contracts entered into by it with some international oil and gas companies with a view to seeking favourable benefits to the country based on prevailing realities in the industry.
Speaking at the France-Nigeria Business Forum organised to mark the state visit of President Muhammadu Buhari to France, the Group Managing Director, NNPC, Dr. Ibe Kachikwu, said that in the weeks and months ahead, the corporation would be re-negotiating the contracts to extract as much benefit as possible for the nation.
Kachikwu was quoted in a statement by the corporation on Tuesday that although the PSC agreements were firm contracts, which should be adhered to, the NNPC was allowed to make use of the window that created 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,” the GMD said.
He, however, noted that in carrying out a review of the existing PSCs, care must be taken not to create an anti-investment atmosphere as that might be counterproductive to the industry.
On the status of France-Nigeria relations in the oil and gas industry, Kachikwu noted that though France had a firm presence in the Nigerian petroleum industry, there was still room for French companies to rev up their presence in the refining areas where Nigeria currently needed support.
“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 and Germany, among others. It’s a huge competition and I am looking forward to better days ahead,’’ he said.
On the ongoing reforms of the Nigeria oil and gas industry, the NNPC GMD stated that the global oil and gas community was showing unmatched excitement about the re-invigoration of the industry.
“There is a lot of interest in our quest to seek joint ventures across the value chain; there are huge potential across board and all we need to do is to galvanize the efforts to get the best out of it,’’ he said.
Kachikwu noted that Buhari’s vision for the industry was on track, adding, “It is being honed every day: there is focus, transparency and diversified income streams.”