Nigeria is looking to rework contracts

Oil companies may have to hand over more revenue

Royal Dutch Shell, Exxon Mobil Corp. and other foreign oil companies operating in Nigeria may soon have to give the government a greater share of revenue from deep-water oil production, Nigeria’s petroleum minister said Monday.

The companies signed production-sharing contracts during the 1990s that allowed them to operate without a joint venture with the government and to pay royalties once the cost of developing the field was fully recovered.


“We’d like to take this opportunity to look at the agreements and try to align our aspirations with the commercial objectives” of the international oil companies, H. Odein Ajumogobia, Nigeria’s petroleum minister of state, said during a conference in New York.

The government wants to amend the agreements, signed when oil was below $20 a barrel. Crude oil rose over $80 a barrel this month. Nigeria is sub-Saharan Africa’s biggest oil producer and the fifth-biggest exporter of oil to the U.S.

“There’s a fundamental change of circumstances that will influence the renewal terms,” Ajumogobia said.

Bloomberg