The Nigerian National Petroleum Corporation (NNPC) has signified its intention to review the over twenty years contract terms with International Oil Firms operating in the country.
Ibe Kachikwu Group Managing Director of the corporation said that the fiscal terms of the existing Production Sharing Contracts (PSC) entered into with the companies will be appraised.
Speaking at the France-Nigeria Business Forum, organised to mark the State Visit of President Muhammadu Buhari to Paris, France, Kachikwu noted that the review would seek favourable benefits to Nigeria based on the prevailing realities in the industry.
He said some of the contracts were negotiated over 20 years ago.
A statement by the NNPC quoted Kachikwu as saying that in the months ahead, the corporation would be renegotiating the contracts to extract as much benefit as possible for the country.
He noted that although the PSCs were firm contracts which should be adhered to, the NNPC is allowed to make use of the provision for renegotiation.
“We intend to begin the process of the renegotiation of the PSCs to see what value chain and improvements we can have from these contracts. Some of the contracts were negotiated over 20 years ago and they have since been overtaken by new realities in the industry,” he said.
The NNPC GMD, however, noted that in carrying out a review of the existing PSCs, care must be taken not to create an anti-investment atmosphere as this might be counterproductive to the industry.