Nigeria warns on oil contracts

Nigeria has warned energy companies it wants to complete its planned renegotiation of contracts covering offshore oilfields in the next three months, saying record prices mean western groups are having “a ball”.

It is the first time Nigeria has come up with a timeframe for renegotiating the complex agreements, which the government signalled it would review late last year in an effort to secure a greater share of profits from offshore production. The urgency will put the oil majors under greater pressure.
The Nigerian move reinforces a global trend of oil-exporting countries demanding better terms to reflect surging prices. Oil executives say the government’s decision to follow the example of countries such as Russia, Algeria and Venezuela could deter investment in Nigeria, where militant violence has shut in a fifth of output since 2006.

But Emmanuel Egbogah, special adviser on oil to President Umaru Yar’Adua, said it was only fair that the government wanted to renegotiate contracts signed when prices were a fifth of the record levels of $100 a barrel touched last month. “We don’t intend to sit around, we’re settling to business, and therefore we’re going to deliver on this as quickly as possible,” Mr Egbogah told the FT. “It is really a ball for the oil companies . . . There’s a lot of room for everyone to share, and the Nigerian government is not the exception.”

Financial Times