Instead of Selling NLNG As a Highly Confused Dangote Suggested - Simon

Instead of selling off the NLNG as a highly confused Dangote recently suggested, I think the FG can 'sell' the NNPC with a buy back option to an organised National Oil company like Saudi Arabia's Saudi Aramco or China's Sinopec. This way, they can help revamp the very rotten NNPC and bring it back to life. The sale could be such that, our FG can buy it back at a pre-determined price in say 15 years time.

My reasons aren't far fetched:

1. As long as the NNPC remains under the ownership of Nigeria, it's going to be very difficult to re-organise it as attempts will always be frustrated by the principalities and powers from within. Look what they recently did to a highly energetic and vibrant Kachikwu.

2. The bulk of the money gotten from this sale- say 150 billion USD could be injected into other sectors of the economy(Agric, Power &manufacturing) for the sake of diversification. In the 15 years under review, focus would be less on oil and more on other sectors and it will help put the country back on track and also engineer(and fasten) the restructuring process.

In all this, the FG should at least retain a 50% stake in the Joint Venture agreement with the oil majors.

I remember reading that China's SINOPEC approached Yaradua's government to purchase a huge stake in the NNPC(some OPL's) for about 50 Billion USD. Then, crude sold for around 80USD a barrel.

Yaradua refused to sanction the deal after consulting with some of the key people in the Nigerian oil industry. This was around the same time SINOPEC had almost bought over America's Chevron, a deal which was only scuppered at the eleventh hour by President Bush(Jnr).

Chevron wasn't even government owned but Bush thought allowing such a sale go through was going to cause a huge dent on the pride of America. My point here is, like Chevron(though privately owned) was seen by the American government as a national asset, so should the excellently performing and properly managed NLNG be seen by the Nigerian government. But we can go back to the drawing board with the Chinese and offer them a huge stake in the NNPC.

But my only fear is, if you lease the NNPC to them for 15 years, they'll bring in all kinds of heavy duty drilling equipment and make sure they suck out all the available oil(both offshore and offshore) under the Nigerian surface within that period. Haha!

- Simon Utsu