The Nigerian National Petroleum Corporation has announced the readiness to revisit the fiscal terms of the existing Production Sharing Contracts entered into by the firm with some international oil and gas companies.
It said the review was aimed at seeking favorable benefits to Nigeria based on the prevailing realities in the industry, as some of the contracts were negotiated over 20 years ago.
The Group Managing Director, NNPC, Dr. Ibe Kachikwu, disclosed this on Tuesday at the France-Nigeria Business Forum organised to mark the State Visit of President Muhammadu Buhari to Paris, France.
Kachikwu said in the months ahead, the corporation would be renegotiating the contracts to extract as much benefit as possible for the country.
He noted that although the PSCs were firm contracts which should be adhered to, the NNPC is allowed to make use of the provision for renegotiation.
Kachikwu, in a statement from the NNPC, reportedly said, “We intend to begin the process of the renegotiation 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 NNPC boss, however, noted that in carrying out a review of the existing PSCs, care must be taken not to create an anti-investment atmosphere as this might be counterproductive to the industry.
On the status of France-Nigeria relations in the oil and gas industry, Kachikwu said France had a firm presence in the Nigerian petroleum industry, but noted that there was still room for French companies to beef-up their presence in the refining areas where Nigeria currently needed support.
He said, “There is no country in Africa that has the kind of resource base Nigeria has. So France really needs to get more bullish if they want to compete in Nigeria with the very aggressive India, China, and Germany. It’s a huge competition and I am looking forward to better days ahead.
“There is a lot of interest in our quest to seek joint ventures across the value chain. There are huge potentials across board and all we need to do is to galvanise the efforts to get the best out of it. There is focus, transparency and diversified income streams.”