Nigeria seeks to review oil deals

ABUJA – Nigeria may seek a bigger slice of revenue in a review of oil contracts with foreign investors, but Africa’s top producer will not annul existing agreements, a top official said last week.

Many oil producing nations have sought to extract greater benefit from ventures with multinationals since prices began to rise at the beginning of the decade and a global scramble for reserves intensified. Rilwanu Lukman, a top adviser to the Nigerian president, said Nigeria would review joint ventures and production sharing contracts with foreign investors as part of a major overhaul of the sector.”The agreements themselves provide for a periodic review of the relationship,” he said at a press briefing in Abuja.Asked whether Nigeria would seek a greater share of revenue, he replied: “We will see what improvement we can instigate.Obviously with the higher price somebody is getting more.”Lukman is chairman of two committees set up by President Umaru Yar’Adua, who took office in May, to reform Nigeria’s energy sector.They have six months to come up with recommendations.He is also chairman of a startup oil company, Afren, which has assets in Nigeria and other African countries.On joint ventures, which produce most of Nigeria’s current output of 2,2 million barrels a day, Lukman said the memorandum of understanding that sets the detailed terms between the government and oil companies was already overdue for review.On production sharing contracts (PSCs), which apply to several new multi-billion dollar offshore developments, Lukman said the agreements provided for renewal after a certain period.There may also be scope for changing interpretation of the original contracts.”We are not going to overnight abrogate the PSCs and have new PSCs.We will go by what has been agreed and when the time for renegotiation comes, we will negotiate,” he said.Foreign investors say Nigeria is seeking to withdraw some tax breaks worth hundreds millions of dollars on some PSCs, but multinationals are putting up a strong fight.Lukman said: “We may have to give more favourable conditions, we may have to reconsider some of our generous terms in order to ensure we are getting the best value.”Nampa-ReutersRilwanu Lukman, a top adviser to the Nigerian president, said Nigeria would review joint ventures and production sharing contracts with foreign investors as part of a major overhaul of the sector.”The agreements themselves provide for a periodic review of the relationship,” he said at a press briefing in Abuja.Asked whether Nigeria would seek a greater share of revenue, he replied: “We will see what improvement we can instigate.Obviously with the higher price somebody is getting more.”Lukman is chairman of two committees set up by President Umaru Yar’Adua, who took office in May, to reform Nigeria’s energy sector.They have six months to come up with recommendations.He is also chairman of a startup oil company, Afren, which has assets in Nigeria and other African countries.On joint ventures, which produce most of Nigeria’s current output of 2,2 million barrels a day, Lukman said the memorandum of understanding that sets the detailed terms between the government and oil companies was already overdue for review.On production sharing contracts (PSCs), which apply to several new multi-billion dollar offshore developments, Lukman said the agreements provided for renewal after a certain period.There may also be scope for changing interpretation of the original contracts.”We are not going to overnight abrogate the PSCs and have new PSCs.We will go by what has been agreed and when the time for renegotiation comes, we will negotiate,” he said.Foreign investors say Nigeria is seeking to withdraw some tax breaks worth hundreds millions of dollars on some PSCs, but multinationals are putting up a strong fight.Lukman said: “We may have to give more favourable conditions, we may have to reconsider some of our generous terms in order to ensure we are getting the best value.”Nampa-Reuters