The Federal Government is considering the sale of some of its assets in the oil and gas sector that will enable it raise revenue to implement it’s programmes while driving greater efficiency in the oil and gas sector.
Through the planned sale of government assets in the oil and gas sector, the Federal Government is targeting to raise about $4.5bn within the first 18 months of the Tinubu administration.
The move is part of measures to raise the much-needed revenue for the administration of President Bola Tinubu and ensure the efficiency of the energy sector.
Details of the plan is contained in a Report prepared by the Policy Advisory Council from the Energy & Natural Resources subcommittees of President Bola Tinubu.
To achieve this, the government is planning to constitute a team to evaluate the portfolios in the upstream, midstream and downstream sectors of the energy industry.
The team is also expected to carry out high level valuation, establish a range of consideration as well as commence preliminary engagements with potential buyers and financiers of these assets.
The document also stated that the government would be appointing external investment banker, legal advisor and financial advisor as well as identify and test transaction principles with key buyers.
The team would also be establishing transaction process, execution timeframe and assess market conditions for transactions while identifying potential bidders for these assets.
They would also be engaging in bidding and negotiation of price and contract terms, draft Sales of Purchase Agreement (SPA), sign SPA and complete sale of IOC Operated assets.
According to the document, the government would mandate the Nigerian National Petroleum Company Ltd, the Nigeria Upstream Petroleum Regulatory Commission and the Nigeria Midstream and Downstream Petroleum Regulatory Authority to close out outstanding divestments and contract issues for project delivery clarity.
The document stated further that the NNPCL would be stripped of policy making roles while the NCDMB would function within its Act mandate.
The government, it added, would also consider integrating NUPRC, NMDPRA, and NCDMB into a single regulator or include all midstream activities into NUPRC scope.
The Tinubu-led administration may also be expanding domestic gas reserves and promote the development of a diversified oil and gas industry by implementing reforms in PIA, develop a sustainable financing model, and facilitate a third-party gas pricing framework for export market.
