The new blueprint has been designed to comply with demands made by the World Bank and other international lenders who are prepared to fund new energy projects in exchange for oil-sector liberalization.
Privatizing portions of the West African country's oilfields will "optimize their efficiency and reduce fiscal burden on the government," according to the plan posted on the Ministry of Budget and National Planning's official website.
To raise government revenues by 350 billion naira, the plan also proposes raising the value-added tax from 5 percent to 15 percent in 2018.
On average, Nigeria has maintained a 55 percent stake in joint ventures with Royal Dutch Shell Plc, Exxon Mobil Corp., Chevron Corp., Total SA and Eni SpA. Combined, the oil majors produce roughly 90 percent of the nation's crude. In addition, the national government owns just under half of Nigeria LNG Ltd, which runs the biggest liquefied natural-gas plant on the continent.
This week, Shell's Nigerian subsidiary announced it has shut down for maintenance the Bonga field, which has the capacity to produce some 225,000 barrels of crude daily, until April. The company provided no further details, but Nigerian media estimated the daily loss in revenue at $10.95 million (3.45 billion naira) at current oil prices.
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The Lagos government has been hemorrhaging money since the 2014 oil price crash severely cut into federal revenues. Last year, separatist groups such as the Niger Delta Avengers (NDA) ramped up attacks on oil facilities run by both foreign and domestic oil companies in order to bring attention to the under-developed state of the oil-rich areas the militants hail from.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More