FG’s JV Stake Sale Could Bankrupt NNPCL – PENGASSAN and NUPENG Warn

FG’s JV Stake Sale Could Bankrupt NNPCL – PENGASSAN and NUPENG Warn

The proposed sale of the Federal Government’s stakes in Joint Venture (JV) oil assets has sparked a strong reaction from Nigeria’s oil and gas workers’ unions. The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) have jointly warned that the move could bankrupt the Nigerian National Petroleum Company Limited (NNPCL) and destabilize the country’s oil industry.

The Federal Government, through the Ministry of Finance and the Economic Management Team, is reportedly considering divesting between 30 to 35 per cent of its stakes in JV oil assets currently managed by NNPCL. These stakes represent the government’s share of critical oil and gas operations across Nigeria.

According to government officials, the planned divestment is aimed at raising quick cash to fund other sectors and improve liquidity amidst global financial constraints. However, the unions argue that such a short-term approach could have devastating long-term effects on Nigeria’s oil sector and the national economy.

Addressing a joint press briefing in Abuja, PENGASSAN President, Comrade Festus Osifo, alongside NUPENG President, Comrade Williams Akporeha, criticized the proposal, describing it as “dangerous” and “short-sighted.” The unions emphasized that NNPCL currently manages these assets on behalf of the Nigerian Federation, and selling off significant portions would undermine its ability to meet key obligations such as staff salaries, welfare, and contributions to the national budget.

“You cannot mortgage our future today and tomorrow we will be starving as a country. If we allow this to continue, it has a way of making NNPCL bankrupt in the next few years,” Osifo warned.

The unions also expressed concern about alleged ongoing moves to amend the Petroleum Industry Act (PIA), passed in 2021 after decades of debate. They accused the Ministry of Finance of seeking to strip the Ministry of Petroleum of its joint ownership role in NNPCL, which they described as a “backdoor attempt” to hijack the company.

According to the union leaders, such amendments would erode investor confidence, weaken NNPCL’s national role, and jeopardize the welfare of oil and gas workers.

The oil workers recalled past examples of divestments by international oil companies (IOCs) like ENI, ExxonMobil, and Shell, which saw their Nigerian operations acquired by domestic firms such as Oando Energy and Seplat. While those transactions shifted ownership, the unions argued that further sales of government stakes would leave NNPCL vulnerable and unable to sustain its commitments.

Why the JV Stake Sale Could Harm Nigeria

• Loss of Revenue: Cutting government stakes would drastically reduce national oil revenue, a major source of Nigeria’s foreign exchange earnings.
• Bankruptcy Risk: The NNPCL may become insolvent if deprived of its core assets and revenue streams.
• Job Losses: Thousands of workers’ salaries, benefits, and pensions could be jeopardized.
• Investor Uncertainty: Frequent policy changes send negative signals to investors, discouraging foreign direct investment (FDI).
• National Security Concerns: Loss of state control over vital oil assets could compromise Nigeria’s energy security.

PENGASSAN and NUPENG jointly called on President Bola Ahmed Tinubu to halt the plan immediately. They urged him to call the Minister of Finance, the Board Chairman of NNPCL, and the Group Chief Executive Officer of NNPCL to order, stressing that such actions threaten Nigeria’s economic stability.

“What they are doing today is sending negative signals to the investors. They are telling the world that we have passed PIA into law but don’t rely on it,” Osifo said. “This is not the direction to go.”

NUPENG President, Williams Akporeha, criticized the government’s inconsistency in implementing oil sector reforms. He noted that the PIA, enacted less than three years ago, has not been given enough time to stabilize before attempts to amend it are being made.

“The investors are just beginning to understand the PIA and how to key in. Suddenly, the government is talking about amendments. When laws are inconsistent, they scare away investment. Every oil-producing nation protects its national oil company, but here, we are trying to strip ours of everything,” Akporeha warned.

Industry experts suggest that instead of selling off JV stakes for quick cash, the Federal Government should focus on:

• Improving transparency and efficiency in NNPCL operations.
• Reducing unnecessary deductions and costs from the Federation Account.
• Promoting public-private partnerships without relinquishing majority ownership.
• Attracting foreign investment through stable policies and tax incentives.
• Strengthening the PIA rather than amending it prematurely.

The controversy surrounding the Federal Government’s JV stake sale highlights the tension between short-term revenue generation and long-term national interest. With oil and gas still accounting for the majority of Nigeria’s export earnings, weakening NNPCL through massive asset sales could spell disaster for the economy and for millions of workers who depend on the industry.

PENGASSAN and NUPENG’s warnings should not be ignored. Instead, the Federal Government must carefully review its policies to ensure they align with Nigeria’s long-term energy security, economic stability, and workers’ welfare. Without such caution, the nation risks undermining its own future.