21 September 2015, Lagos – The partnership between ExxonMobil and the federal government over oil and gas activities in Nigeria is being threatened as the latter has been accused of defaulting in meeting its side of cash call obligations under the joint venture assets held by the United States multinational and the Nigerian National Petroleum Corporation (NNPC).
Speaking at a business review section after the presentation of the 2015 Energy Outlook series held in Uyo, Akwa Ibom State, the Manager, Field Law Services of ExxonMobil, Mr. Omojuwa Oteri, said the company’s operation has experienced a 53 per cent decline because of failure of NNPC to honour its cash call obligations.
According to him, the US oil giant started experiencing a decline in its production activities 10 years ago due to the non-release of 60 per cent cash call arrears by the joint venture partner.
“Our joint venture production over the last 10 years had been declining up to about 53 per cent. This is mainly because of our joint venture partner’s failure in several instances to honour their cash call obligations to the business,” he said.
Oteri explained that the federal government, which is represented by NNPC, is meant to contribute 60 per cent in the joint venture while ExxonMobil pays the balance of 40 per cent.
He said the failure by NNPC to pay obligations to the joint venture had impacted negatively on investments outlook and profitability of the business.
“In addition to this problem, we now find a global trend where the price of oil is right now closed to 40 dollars per barrel. This affects profitability of our business and outlook for investments,” he stressed.
The ExxonMobil manager maintained that the oil major was suffering from difficult times due to falling oil prices and non-payment of cash call obligations from partners.
He said another area he would call for understanding and cooperation because of the difficult business environment is in the area of Nigeria content application or development.
“It is difficult period for the industry, it is difficult period globally and it is a difficult period for us locally. The reality in which we have seen the value of our business is almost eroded by global downward trend of event. Our capacity to invest in our business is impacted by this reality,” he added.
Calling on opinion and community leaders not to engage the oil firm in such a way that could disrupt their business, Oteri solicited for the understanding and cooperation of the business community, host communities, individual, government and stakeholders in the present circumstances.
- This Day