Tuesday, June 28, 2011

Nigerian oil bill shelves joint venture plan-sources

28 June 2011

* Joint venture funding plan not included in latest bill

* Oil companies, govt need certainty to progress industry

* New lawmakers likely to make amendments

* Outgoing oil minister hopes bill will pass by Q4 - paper

By Joe Brock

ABUJA, June 28 (Reuters) - Nigeria has shelved plans to overhaul its joint venture partnerships with foreign oil firms according to the latest version of its long-delayed energy reforms, one of the pillars of the original bill, sources said.

It was hoped Incorporated Joint Ventures (IJVs) would solve funding shortfalls within state-owned oil firm NNPC, which have been one of the biggest brakes on development in Africa's largest energy industry over the last decade.

IJVs were used by the government to promote the Petroleum Industry Bill (PIB) but foreign oil companies like Shell (RDSa.L), Exxon Mobil and Chevron were concerned it would mean ceding operational control to NNPC.

"The IJVs are off the table for now," one executive at a foreign oil company who asked not to be named said. Several other sources close to the passage of the bill said IJVs were not in the latest draft. Further changes are possible.

"The oil majors don't think they would solve the funding problems and it would mean NNPC members became chairmen of the boards and they would want to manage operations that they (foreign oil majors) believe are better handled by themselves."

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