The Nigerian Government is currently in a tough position as oil revenues continue to take a hit following the drop in global oil prices as well as the over supply in the market. This has made a lot of people (including those in government) to think about diversifying its revenue base from over reliance on Oil to perhaps taxation.
Nairametrics has also argued severally that the moment Nigeria’s focusses on tax collection as its only revenue source, the government becomes more accountable.
Now, one of Nigeria’s foremost indigenous Upstream Oil company, Seplat has also weighed in on the argument. According to Reuters, the Chairman of Seplat, ABC Orjiakor has asked Nigeria’s new government to sell its stakes in joint ventures in the country’s energy industry.
He also added that his company would be interested in buying, especially in the gas sector.
“Collecting tax and focus on making sure that the industry grows, and when the industry grows it will create jobs … and do something for the government,” he said, speaking on the sidelines on an investment conference.
“And the best way is to not necessarily to hold massive working interests in the JVs,” he said, adding Seplat would be interested in picking up some of the stakes, especially in the gas sector, if terms were right.
Orjiako added the new government should scrap fuel subsidies and do more to diversify the economy.
“Subsidy removal should happen now,” he said. “The reality is that the subsidy is not trickling down effectively … What we expect government to do is take a bold step … demonstrate good governance, invest in infrastructure, justify the taxes.”
It is probably not a surprise to have Seplat support the sale of government interest in JVs considering that it will give them greater control and deepen their reserves. What is however surprising is them asking the government to focus more on taxes even though they themselves enjoy non tax paying status.