Nigeria Oil Contracts Review Adds to Industry Uncertainty
- Drop in oil prices is putting pressure on government revenue
- Deep offshore production accounts for about half of output
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Plans by Nigeria, Africa’s biggest oil producer, to review offshore production contracts signed with international oil companies two decades ago, have added to uncertainty in an industry already lacking regulatory clarity, said analysts including Philippe de Pontet of Eurasia Group.
The objective is to increase Nigeria’s earnings from the fields, according to Emmanuel Kachikwu, group managing director of the Nigerian National Petroleum Corp. Yet, declining crude oil prices take away some of the incentive for investments that would’ve given the government more leverage in negotiations.