04 December 2017, Sweetcrude, Lagos — The planned sale of five percent stake by the Nigerian government in oil joint ventures with the international oil companies operating in the country will not take effect in the next one year, Minister of Petroleum, Ibe Kachikwu has said.
During a live interview with Bloomberg TV after the 173rd Organisation of the Petroleum Exporting Countries, OPEC’s conference in Vienna, Austria, the minister disclosed that the process to sell the five percent stake is yet to begin, adding that he does not expect to see the arrangement perfected within one year.
“The Federal Government just announced the sale and we haven’t even begun the process. Give and take, these things take time. I don’t expect to see fusion and completion in this area within one year”, he said.
“However, in terms of JV cash call, we are doing very well,” he added.
The Debt Management Office, DMO, while reacting to the downgrade of Nigeria from a B1 stable to a B2 stable rating by Moody’s Investors Service Research, had stated that at least N710 billion is expected in 2018 from the restructuring of government’s stake in the various Joint Ventures oil assets.
According to the DMO, this planned exercise was included in the 2018 budget proposal presented to the National Assembly by President Muhammadu Buhari.
“Our revenue initiatives are changing the mix of revenue sources available to the government from the traditional oil or debt to a combination of oil, debt and domestic revenue.
“For example, the 2018 budget includes N710 billion proceeds from the restructuring of the government’s equity in the JV oil assets.
Leading oil firms like Royal Dutch Shell, Chevron, Total, Eni, and ExxonMobil, operate in Nigeria through joint ventures with the Nigerian National Petroleum Corporation, NNPC.
President Buhari, during his presentation of the N8.6 trillion 2018 budget, told the parliament that his administration targets a total of N4.165 trillion revenue from the non-oil sector and this include “Share of Companies Income Tax (CIT) of N794.7 billion, share of Value Added Tax (VAT) of N207.9 billion, Customs & Excise Receipts of N324.9 billion, FGN Independently Generated Revenues (IGR) of N847.9 billion, FGN’s Share of Tax Amnesty Income of N87.8 billion, and various recoveries of N512.4 billion, N710 billion as proceeds from the restructuring of government’s equity in Joint Ventures and other sundry incomes of N678.4 billion.”