While the national debate on the sale of asset to raise funds to help Nigeria out
of recession continues, the federal government last week said it has not taken a firm decision on the matter.
However, despite the government’s seeming indecision, a top official of the presidency had told PREMIUM TIMES about the administration’s intentions.
“Some of the intended sales could be in form of time-bound leases, advance renewal payments on leasing licenses and concessioning, which would attract buoyant signature fees,” the official said.
Below are some of the asset that may be affected should the federal government finally decide on asset sale:
Nigeria Liquefied Natural Gas Limited
The six trains facility is reputed to possess the capacity to produce 22 million tonnes per annum (MPTA) of liquefied natural gas (LNG), and 5 MPTA of natural gas liquids (NGLs) from 3.5 billion standard cubic feet per day (BCF/D) of natural gas feedstock.
It is owned by four shareholders, namely: Nigeria, represented by Nigerian National Petroleum Corporation (49 per cent), Shell (25.6 per cent), Total LNG Nigeria Ltd (15 per cent) and Eni (10.4 per cent).
The NLNG-Six project consists of Train 6, additional condensate processing and additional LPG storage and Jetty facilities making up Train 7, under construction. When completed, total production capacity of the plant would grow to 30 MPTA of LNG.
The NLNG was incorporated as a limited liability company on May 17, 1989, to harness Nigeria’s vast natural gas resources and produce liquefied natural gas and natural gas liquids for export.
Its subsidiaries include Bonny Gas Transport (BGT) Limited and the NLNG Ship Management Limited (NSML).
The company has been Nigeria’s cash cow in critical periods.
In 2015, when the present administration came to power, the $2.1 billion dividend and royalty from NLNG served as the take-off grant.
The presidency official told PREMIUM TIMES that only five per cent of government’s 49 per cent equity would be sold, with a buy-back clause to be included in the share purchase agreement (SPA), for government to repurchase the shares when the situation has improved.
The arrangement would leave government with 44 per cent stake-holding in the plant.
“The federal government does not own the entire gas company, and will certainly not sell-off its entire shares. Government is open to selling 5 per cent, or thereabout of its 49 per cent shareholding. The decision is yet to be taken at all,” he said.
The Nigerian National Petroleum Corporation (NNPC) is the state-owned national oil company with business interests in the upstream and downstream sectors of the oil and gas industry.
In the upstream industry, NNPC operates seven joint venture partnerships, with Shell (55:45 per cent) and 60:40 per cent with Mobil, Chevron, Total, Agip, Elf and Panocean.
The corporation has at least 11 subsidiaries, with strategic business interests spanning exploration and production, gas development, refining, distribution, petrochemicals, engineering, and commercial investments.
It is not clear what percentage equity in the joint ventures or any of the subsidiaries the government is contemplating selling.
However, the Governor of Nigeria’s Central Bank, Godwin Emefiele, said government would soon commence the sale of about 15 per cent of its oil asset held by NNPC.
Mr. Emefiele, who has consistently canvassed selling part of government equity in the oil and gas joint ventures, said the present proposal is expected to yield a minimum revenue inflow of $10 billion for the country.
“A team of consultants has been commissioned to carry out a study on the proposed sale. The country’s income would have been beefed up to $15 billion if the asset had been sold earlier in the year,” Mr. Emefiele said.
3. Port Harcourt Refining Company Limited (PHRC)
The Port Harcourt Refining Company Limited is a subsidiary of the NNPC.
The 210,000 barrels per stream day (BPSD) facility consists the 60,000 BPSD capacity refinery commissioned in 1965, and the new 150,000 BPSD capacity refinery opened in 1989.
In view of its declining production capacity in recent years as a result of age and poor maintenance, the refinery has been one of the facilities in the petroleum industry often identified for possible sale.
It was actually sold during the dying days of the Olusegun Obasanjo administration to some private investors, but the sale was reversed by the Umaru Yar’Adua administration following protests by concerned Nigerians that the process was not transparent.
4. Kaduna Refining & Petrochemical Company (KRPC)
KRPC LIMITED is another subsidiary of the NNPC involved in refining of crude oil into petroleum products and petrochemicals.
The 110,000 BPSD installed capacity refinery was designed to process heavy crude oil from Kuwait, Venezuela, Saudi Arabia or Russia.
The refinery has been performing below installed capacity for long, mainly as a result of poor maintenance.
It is also one of the establishments in the oil and gas industry often touted for sale.
5. Warri Refining & Petrochemical Company Limited.
Warri Refining and Petrochemical Company is a wholly owned NNPC subsidiary established in 1978, to process 125,000 barrels of crude oil per day.
The refinery’s refining capacity has equally dwindled drastically over time, recommending it for possible inclusion in government’s list of potential establishments likely to be sold.