AN EVALUATION OF THE NIGERIAN GOVERNMENT’S EQUITY PARTICIPATION IN THE PETROLEUM INDUSTRY

Abstract

The Petroleum Act 1969 set the stage in providing the ground for the State to engage in some form of equity participation with Multi National Oil Companies (MNOCs) in Nigeria. This has been largely achieved through joint venture agreements between our national oil company, Nigerian National Petroleum Corporation (now NNPCL), and the multinationals with Shell Petroleum Development Company Nigeria Limited leading the way. The Nigerian Government, has through such ventures acquired interest in capital investments and operations of the M.N.O.Cs. Despite Nigeria’s vast petroleum resources and government involvement in the Oil and Gas sector, the industry has faced numerous challenges, including mismanagement, revenue leakages, inadequate infrastructural development, and environmental degradation. The inefficiencies of government agencies, coupled with regulatory bottlenecks, have raised concerns about the effectiveness of government participation in achieving sustainable economic growth and development. The recent removal of subsidies on Petroleum products by the Federal Government of Nigeria have created both opportunities and challenges, as the government must now ensure the reinvestment of saved funds into critical infrastructure and social welfare programs to mitigate the attendant economic hardship. The aim of this paper is to evaluate the participation of the Federal Government of Nigeria in the Petroleum industry. It traces the historical evolution of state participation and evaluates some major legal and policy instruments such as the Petroleum Act of 1969, the Petroleum Profits Tax Act and the Petroleum Industry Act of 2021 including the recent transition of the Nigerian National Petroleum Corporation into a Public Company. The study adopts the doctrinal legal research methodology.