- It would amount to economic sabotage to sell the NLNG
It is most incongruous if not perverse for a government to be seen to be sabotaging the state. Unfortunately, this is the scenario being painted by the persistent and stealthy moves to divest Federal Government holding in the Nigerian Liquefied Natural Gas (NLNG).
Last week, the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) raised what may be described as a plaintive lament on this matter. In a statement signed by its head, public relations, Ibrahim Mohammed, the commission warned the Federal Government against what it tags the proposed sale of national assets, especially the NLNG.
According to the RMAFC, the Federal Government’s Economic Recovery and Growth Plan (ERGP) proposed that government should reduce its equity in the NLNG and Joint Venture oil and gas assets. The commission noted that the clamour for the sale of Nigeria’s oil assets had continued in spite of its earlier advice against it.
Late in 2016, with the country roiled by what may be the worst economic recession in her history, there had been a campaign to sell all or some of her stakes in the NLNG. During a television interview in South Africa, Nigeria’s business mogul, Aliko Dangote, had canvassed that government should sell off some of her oil and gas assets to raise requisite cash to combat recession. He had mentioned the NLNG specifically. The helmsmen of the senate as well as the governor of the Central Bank of Nigeria were reported to have backed Dangote’s proposition.
However, the seeming subterranean move to divest the Nigerian state of her interests in the NLNG started in 2014 when some private sector business interests had approached the then President Goodluck Jonathan to sell off part of her equity holding in the NLNG. But the proposal may have hit a cul de sac when it was realised that shareholders in the joint venture had the right of first refusal in the sale of its shares.
The NLNG started operation about 30 years ago as a joint venture between Nigeria (NNPC, 49%), Shell Gas BV (25.6%), Total (15%) and ENI International (10.4%).
Regardless that it took about two decades between conceptualisation and actual completion, and despite the Halliburton bribery scandal that signposted its construction, the NLNG remains a model of investment in Nigeria’s vast oil industry. No other venture has succeeded as much. Starting from one train, it is now on the sixth with the seventh train in the offing.
It has been very profitable and quite lucratively so too. According to reports, between 1999 and 2015, the NLNG recorded revenue of about $90.3 billion from an investment of about $15.6 billion. Nigeria through the Nigerian National Petroleum Corporation got dividends of about $15.3 billion while the other shareholders received about $16 billion.
Reportedly, two tranches of dividend payouts were made in 2015. In July, the sum of N412.6 billion was disbursed to the Federal Government while $400 million was paid in December of same year.
The question then would be why any government would seek to slaughter a goose that lays golden eggs? According to RMAFC, there are several options open to the Federal Government other than outright sale of what is considered a most lucrative business.
First, government could borrow long-term against her dividends in NLNG, for instance. Another measure is to convert her joint venture holdings in some multinational oil corporations into incorporated joint venture companies.
For the RMAFC to cry out once again on this matter must mean that it may have noticed some untoward movements.
We commend RMAFC’s apparent patriotic zeal in railing at what can be considered an economic sabotage. The NLNG remains the shining light of an oil industry that is an example of how not to manage a national asset.
Despite some blips in its history, the NLNG has been a huge success and should be replicated. It must by no means be sold.
