Nigeria to review agreements with major oil companies

The Nigerian federal government has decided to review all the agreements with major oil multinationals operating in the country in the interest of the nation.
Federal Minister of Petroleum Resources Edmund Daukoru was quoted as saying that "the exercise will take place before the end of this year and will be one legacy President Obasanjo will leave in the upstream sector of the oil and gas industry." The initiative meant that the Nigeria National Petroleum Corporation (NNPC) would take up the operations of a number of oil blocks, he said.

The agreements included the Joint Operating Agreements (JOAs), Memorandums of Understanding (MoUs) and the Production Sharing Contracts (PSCs). According to the oil minister, the exercise will reduce the problems of cash calls since it will address squarely funding in the upstream as well as profit sharing between operating companies and the NNPC.
"The exercise, when carried out, will boost government's revenue as well as interest in the upstream sector," he said.

He added that Nigeria was taking a cue from countries such as Algeria and Venezuela where cash calls were not much of a problem to the government.
Venezuelan President Hugo Chavez had raised percentages of all operating agreements with oil companies to 50:50 in terms of profit sharing, and asked any company not interested with the new arrangement to leave the country.