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Sylva: Nigeria does not expect full recovery of $62bn claims against investors
NIGERIA
NIGERIA’S government earlier this month had demanded compensation from international oil companies (IOCs), saying that it was entitled to lay claim to $62bn in lost revenues on the basis of a contract law adopted in 1993 and a Supreme Court ruling issued in 2018. Last week, though, Minister of State for Petroleum Resources Timi- pre Sylva signalled that Abuja was tempering its expectations.
Speaking to journalists after a weekly meeting of Nigeria’s cabinet, Sylva said that the govern- ment did not anticipate the recovery of all the funds it had claimed. “Nobody can bring out that kind of money,” he remarked. “I mean, we can’t get $62bn. We can maybe get something from them, but not $62bn. It’s an opportunity we have lost.”
In the meantime, he said, Nigerian author- ities are continuing to negotiate with several major IOCs, including Chevron (US), Eni (Italy), ExxonMobil (US) and Royal Dutch Shell (UK/ Netherlands). He did not reveal any details of the discussions or say when the parties might reach agreement.
He did state, though, that Abuja was taking
action to protect its interests in the future. Spe- cifically, he said, Nigerian legislators are debating amendments to the 1993 law that are designed to optimise the state’s revenues from oil and gas projects.
“We have to ensure that this bill is passed,” Sylva said. “With this bill now, there will be some adjustments in the fiscal regime, and we believe that the government will get a lot from the oil companies, especially their [deepwater offshore] exploration activities.”
He was speaking several days after Nigerian President Muhammadu Buhari speculated that the amendments might generate an additional $500mn for the federal budget in 2020 and $1bn more in 2021. Members of Nigeria’s Senate approved the new legislation last week.
According to Reuters, Abuja submitted its demands to IOCs earlier this year, saying it was entitled to do so because the 1993 law provided for the terms of production-sharing contracts (PSCs) to be revised whenever crude oil prices topped $20 per barrel. Shell and Chevron have reportedly chosen to fight the claims in court, the news agency said.
CROSS-BORDER
Sudan, Ethiopia agree to build joint pipeline
ETHIOPIA
THE governments of Sudan and Ethiopia are reportedly planning to work together to build a crude oil pipeline capable of serving both countries.
The two sides reached agreement on the pro- ject during a recent meeting between Ethiopia’s Minister of Water, Irrigation and Electricity Seleshi Bekele and Sudanese Minister of Energy and Mining Adel Mohamed Ibrahim in Addis Ababa, Sudan News Agency (SUNA) reported earlier this month.
Ibrahim was part of a delegation accompany- ing Sudanese Prime Minister Abdalla Hamdok on an official visit to the Ethiopian capital, the agency said.
Ibrahim said after the meeting that both Khartoum and Addis Ababa were ready to work with Juba to expand the scope of the project. Ethiopia and Sudan intend to invite South Sudan to “co-establish another branch of the pipeline to extend it to reach the state of South Sudan for thebenefitofthepeopleoftheregion,”hestated.
“The Ethiopian side is very interested and enthusiastic about this project, and we will start to implement it soon after the completion of
partnership procedures,” he added, according to SUNA.
Neither Ibrahim nor Bekele divulged many details about the project. They did not reveal what route the link might follow, how long it might be or how much it was likely to cost.
But they did indicate that the parties were considering proposals for co-operation on other schemes. For example, the Sudanese minister said that the parties had talked about expanding terminal facilities in Port Sudan “so as to accom- modate a number of ships and gas and gasoline tankers.”
He also said that Ethiopian authorities had expressed interest in joining an upstream devel- opment project in Sudan. Specifically, he said Addis Ababa was seeking to acquire a stake in a consortium known as Nile Petroleum Co. (NPC) and was drawing up a proposal to that effect.
Additionally, he said, the Sudanese and Ethiopian government had discussed technical co-operation in the area of oil and gas explora- tion and development. The two sides may team up to establish a joint information and training centre, he stated.
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