Vice President Yemi Osinbajo has stated the Federal Government is not currently planning to sell the nation’s four refineries or part of its stakes in joint venture assets in the oil and gas sector. Osinbajo stated this in an interview with Bloomberg.
The Group Managing Director, Nigerian National Petroleum Corporation, Dr. Ibe Kachikwu, was recently reported to have stated that any of the refineries that failed to work optimally at the expiration of a 90-day ultimatum would be sold.
quoted Kachikwu on September 25 as saying, “By the end of December when the 90-day ultimatum will expire, any refinery that does not work optimally will be sold.”
When asked if selling the refineries or government’s stakes in joint venture assets was on the table, Osinbajo said: “At the moment, we are not considering any of those. Of course, they are options that are always there. These options are always there – selling our stakes in joint ventures and all of that. But we think that we are able to resolve some of the cash call difficulties that we have experienced in past years.
“We think that some of what is taking place – the incorporation of the JVs and the JV partners being able to simply borrow, even on behalf of the Federal Government – I mean, able to introduce their own capital into it. These are just ways that we can raise our own portion of contributions to the joint ventures.
“It will only be a last resort to sell down government’s stakes in the joint ventures and we don’t think we have come anywhere near that.”
As stated by Osinbajo, the present administration wanted to encourage the development of private refineries in order to cut Nigeria's dependence on imports.
He stated more than 30 licences for refineries have been granted and private refineries will be allowed to build near the state-run units so that they can “benefit from the available infrastructure.”
“In the medium term, we will be able to get cheaper pump price of oil because we will be importing far less refined petroleum,” Osinbajo stated.
Commenting on the Petroleum Industry Bill, the vice president said: “Separating the PIB and breaking it up, obviously is the way I would think that we’ll proceed,” Osinbajo said, adding, “That’s really what the market has been waiting for.”
As stated by Kachikwu, the proposed law has been held up largely by political wrangling and objections by international oil companies, which say the government is demanding too big an increase in its share of revenue. The delays have caused uncertainty and are costing $15bn a year in lost investments.