Nigeria To Renegotiate PSC Contracts With Oil Majors

The NNPC has stated plans to review and renegotiate its production sharing contracts (PSC) with major multinational oil companies in Nigeria, as part of efforts by the current administration to reform and clean up the sector which is the major source of income to the nation’s economy, Business Day Reports.

Dr. Ibe Kachikwu, the new boss of the nation’s owned oil company (NNPC), has said in a statement that “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”.

In order to extract as much benefits as possible for the nation’s economy, the NNPC has disclosed that in the weeks and months ahead, that it would overhaul its contracts with companies like American majors; ExxonMobil and Chevron, Dutch major; Shell and Italian major; Eni.

Nigerian economy gets about 70 per cent of government revenues from oil, has been hit hard by the plunge in global oil prices and has recently spent billions trying to defend its currency, which the market believes needs to be devalued for the third time in less than a year.

The need for the PSC review is needful “Some of the contracts were negotiated over 20 years ago and they have since been overtaken by new realities in the industry,’’ said Kachikwu, speaking while in France on a state visit with Buhari.