An alleged plan by the Federal Government to sell some of its stakes in the Joint Ventures with international oil companies operating in the nation has received opposition from members of the Petroleum and Natural Gas Senior Staff Association (PENGASSAN) and the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG).
The Nigerian National Petroleum Company Limited’s 30% management fee and 30% frontier exploration deduction are reassessned in accordance with President Bola Tinubu’s directive last month, according to the Petroleum Industry Act (PIA) president.
Tinubu cited the need to streamline deductions from the Federation Account, improve fiscal discipline, and optimize government savings as needed while charging the Economic Management Team.
The two unions asserted at a joint news conference in Abuja on Tuesday that selling those stakes will not only endanger the nation’s oil sector, but also devalue efforts being made to defend the naira on the foreign exchange market.
Festus Osifo, president of PENGASSAN, and Williams Akporeha, his NUPENG counterpart, objected to a proposal to reduce government stakes in JV assets by up to 30%.
Through the NNPCL, FG currently controls between 55 and 60% of these assets.
Selling stakes in the assets, in their opinion, would hurt Nigeria’s long-term economic security, bankrupt NNPCL, impede its ability to meet obligations like salaries and welfare benefits, and reduce its contributions to the national budget.
“The government wants to reduce its ownership of these assets,” the statement read. They may be referring to selling up to 35% in some cases. However, we reject it.
You can’t mortgage someone’s future for a short-term gain.
“On behalf of the Federation, the NNPCL manages JV assets. The entire Nigerian population, not just the Federal Government, owns all oil wells. The national oil company will be too weak to deliver, he claimed, and the federation will lose if these stakes are sold.
The unions also claimed that NNPCL’s joint ownership of the Ministry of Petroleum was being attempted by the ministry of finance.
They argued that the PIA’s proposed changes would strip NNPCL of its core national function, frighten investors, and send a bad signal about Nigeria’s policy consistency.
After years of fighting, the PIA was overturned. Investors are only just getting started. The government wants to amend it once more, right now. That sends a dangerous signal, Akporeha claimed. Every serious oil-producing country, in his opinion, safeguards its national oil company. He continued, “Here, we are stripping ours of its strength,” he continued.
Nigeria will struggle to raise the money to pay its budget if these proposals are successful. We will resist it because it creates a crisis, Osifo said.
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The oil workers also called for a stop to a proposed amendment to the Petroleum Industry Act (PIA), which they had pledged to oppose whenever it was attempted to proceed with the plans.
We completely reject the idea from the Ministry of Petroleum, the Ministry of Finance, NNPCL, or even the Presidency itself. In a few years, NNPCL will go bankrupt. Osifo resolutely said, “We will not allow that to happen.”
Akporeha noted that the PIA, which was only passed three years ago, needed to stabilise before considering new amendments.
