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Editorial Dept

Editorial Dept

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Nigerian Oil: The Further From The Mainland, The Safer For The Investor

Refiner

Ambivalence is one of the first words that comes to mind when thinking about the state of Nigeria’s oil sector. Endowed with a truly tremendous resource base, it seems that Nigeria’s deficiencies do not grow smaller with time and only become cluttered with even more complex dilemmas. Take, for instance, Nigeria’s elections this year which have propelled a relatively pro-market Petroleum Minister Timipre Sylva, eager to increase foreign direct investments into the Nigerian energy segment by decreasing the state’s participation there. Upon the face of it, seems a very welcome development, yet given what happens simultaneously with the Energy Ministry’s trust-building utterances, one cannot help but notice that the whole government sounds rather out of tune.

Let’s start with the one development which is undoubtedly positive – Petroleum Minister Timipre Sylva announcing this week that he would seek to reduce the government’s stake in joint ventures with oil majors from the current 55-60% to a more reasonable 40%. Sylva sees this step as one of the preconditions to kickstart new output and bring the Nigerian total output volume to 3mbpd, a long-coveted aim given the African nation’s dependence on these JVs – some 90% of the aggregate national production originates there. Concurrently, however, another branch of the Nigerian authorities is intent on reaching a different kind of deal.

The same day that Minister Sylva detailed his future plan, Nigeria’s attorney…




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