AIRLINK 62.48 Increased By ▲ 2.05 (3.39%)
BOP 5.36 Increased By ▲ 0.01 (0.19%)
CNERGY 4.58 Decreased By ▼ -0.02 (-0.43%)
DFML 15.50 Increased By ▲ 0.66 (4.45%)
DGKC 66.40 Increased By ▲ 1.60 (2.47%)
FCCL 17.59 Increased By ▲ 0.73 (4.33%)
FFBL 27.70 Increased By ▲ 2.95 (11.92%)
FFL 9.27 Increased By ▲ 0.21 (2.32%)
GGL 10.06 Increased By ▲ 0.10 (1%)
HBL 105.70 Increased By ▲ 1.49 (1.43%)
HUBC 122.30 Increased By ▲ 4.78 (4.07%)
HUMNL 6.60 Increased By ▲ 0.06 (0.92%)
KEL 4.50 Decreased By ▼ -0.05 (-1.1%)
KOSM 4.48 Decreased By ▼ -0.09 (-1.97%)
MLCF 36.20 Increased By ▲ 0.79 (2.23%)
OGDC 122.92 Increased By ▲ 0.53 (0.43%)
PAEL 23.00 Increased By ▲ 1.09 (4.97%)
PIAA 29.34 Increased By ▲ 2.05 (7.51%)
PIBTL 5.80 Decreased By ▼ -0.14 (-2.36%)
PPL 107.50 Increased By ▲ 0.13 (0.12%)
PRL 27.25 Increased By ▲ 0.74 (2.79%)
PTC 18.07 Increased By ▲ 1.97 (12.24%)
SEARL 53.00 Decreased By ▼ -0.63 (-1.17%)
SNGP 63.21 Increased By ▲ 2.01 (3.28%)
SSGC 10.80 Increased By ▲ 0.05 (0.47%)
TELE 9.20 Increased By ▲ 0.71 (8.36%)
TPLP 11.44 Increased By ▲ 0.86 (8.13%)
TRG 70.86 Increased By ▲ 0.95 (1.36%)
UNITY 23.62 Increased By ▲ 0.11 (0.47%)
WTL 1.28 No Change ▼ 0.00 (0%)
BR100 6,944 Increased By 65.8 (0.96%)
BR30 22,827 Increased By 258.6 (1.15%)
KSE100 67,142 Increased By 594.3 (0.89%)
KSE30 22,090 Increased By 175.1 (0.8%)
Business & Finance

Nigeria negotiates terms with Big Oil to keep investments

  • Nigeria is Africa's top oil exporter.
  • Companies need attractive terms to invest – Kyari.
  • Oil majors are cutting spending worldwide.
  • NNPC seeking $2 bln in pre-finance for Warri, Kaduna refineries.
Published February 5, 2021

LAGOS: Nigeria's state oil company is renegotiating commercial contract terms with major oil firms, its chief told Reuters, in a move that it hopes will keep investment flowing into a sector crucial for its economy at a time when spending is being slashed.

Africa's largest oil exporter and biggest economy relies on the oil sector for half of its budget and 90% of its foreign exchange. It wants to raise revenue but also attract investment.

Oil companies meanwhile, including Royal Dutch Shell, ExxonMobil, Total and Eni, are cutting billions in spending after taking hits to their profits, shifting money to renewable fuels and focusing only on the most cost-effective markets.

Mele Kyari, group managing director of the Nigerian National Petroleum Corporation (NNPC), said in an interview on Friday that new commercial terms were being negotiated and would be finalised before a pending oil overhaul bill is passed.

"No company will invest where they cannot get the appropriate margin," Kyari said in a video interview, declining to say specifically what was being renegotiated.

"We're very conscious of the fact that people have choices, companies will make choices to leave countries when they have to."

Nigeria's parliament has promised to pass the long-awaited oil overhaul bill by May. It will define the sector for decades to come, but companies have criticized the draft for not doing enough to attract development dollars. They have raised issues over taxation, royalties and local community obligations.

Kyari said companies would have the option of the newly negotiated commercial terms or moving to the updated terms outlined under the new law.

By the end of June the NNPC is planning to have found $2 billion of financing to overhaul its Warri and Kaduna refineries, Kyari said. Talks are underway on financing repairs to the Port Harcourt refinery after a pre-finance bid for more than $1 billion was oversubscribed, he said.

The money will be repaid in profits and fuel cargoes from the refineries, rather than in oil cargoes, Kyari said.

While the refineries have not operated at full capacity for years, NNPC had to shut all of them completely last year as they await much-needed maintenance, repair and upgrades, leaving it with a hefty fuel import bill.

Comments

Comments are closed.