FG targets sale of 40% of new state oil firm

The federal government (FG) plans to split state oil firm NNPC into two to help ease a planned stake sale and wants to sell at least 40% of a newly created National Petroleum Co (NPC) in coming years,Reuters reports.

The new draft of a long awaited bill envisages the sale of at least 10% of NPC over five years and is targeting 40% or more over 10 years. Parliament is to start debating within days the amended Petroleum Industry Bill, in the works for a decade and designed to change everything from taxes to environmental rules and revenue sharing, as well as overhauling NNPC. Lawmakers have not previously been able to agree on the 200-page bill, but President Muhammadu Buhari’s resolve to reform the petroleum sector has made its passing a priority and has meant that the West African nation is breaking up the bill to speed up the process, with the first part dealing with the reform of NNPC.

A source involved in the draft said selling a larger stake was intended to raise more funds and help minimize the risk of corruption, because of the greater influence of outside investors and private firms. “Bidding is open to international investors,” the source said. The NPC will look after joint ventures mainly with oil majors, while the second company to be created from NNPC, dubbed NPAM, will manage all production-sharing contrac‎ts and service agreements, a second source involved in drafting the bill said.

No Comments Yet.

Leave a comment