The Federal Government will reduce its stakes in joint venture oil assets to 40 per cent in the 2019 fiscal year, budget documents released on Tuesday showed, according to Reuters.

The Minister of Budget and National Planning, Senator Udo Udoma, disclosed in March government’s plan to reduce its stakes in the assets.

The President Muhammadu Buhari-led administration had in its Economic Recovery and Growth Plan released in 2017, said it would reduce its stakes in JV oil assets, refineries and other downstream subsidiaries such as pipelines and depots.

Oil companies including Royal Dutch Shell, Chevron and ExxonMobil, operate in Nigeria through JVs with the Nigerian National Petroleum Corporation.

The NNPC owns 55 per cent stake in its JV with Shell and 60 per cent stakes with others.

The government has considered reducing its majority stakes in these joint ventures for more than a decade but was under little pressure as higher oil prices boosted state coffers.

The PUNCH on March 25, 2019, that cash call payment for the development of joint venture oil and gas assets ate into the Federal Government’s revenue last year as a total of N1.829tn was paid, according to the Nigerian National Petroleum Corporation, which represents the government in the JVs.

Under the JV arrangement, both the NNPC and private operators contribute to the funding of operations in the proportion of their equity holdings and generally receive the produced crude oil in the same ratio.