Oil Joint Venture Partnerships and Nigerian Economy

The logical outcome of the renterism of the Nigerian state is oil dependence. The Nigeria's dependent and rentier economy has ensured that oil remains the mainstay of the country's economy since early 1970. In Nigeria, oil revenue alone accounts for nearly 90 percent of the total revenue and foreign exchange earnings, and more than 90 percent of export earnings. More importantly, oil production in Nigeria has been dominated by the oil joint venture partnerships accounting for over 90 percent in the upstream oil subsector. But oil joint venture partnerships which Nigerian government entered into with the international oil companies (IOCs) through the NNPC have been hampered by shortfalls and delays in meeting cash call obligations by JV partners leading to cuts in their operations and substantial reductions in oil production and shortfalls in projections which in turn result in significant reductions in oil revenue and shortfalls in oil revenue projections. Ultimately, the reductions in oil revenue and oil revenue projection, given the Nigerian's oil dependence, lead to significant reductions in the national revenue and shortfalls in the expected revenue. The implication of this is poor implementation of national budgets and the consequent inability of the government to provide essential public services and infrastructures which reinforces oil dependence and deepens the economic hardships in Nigeria