A Review of the Nigerian Energy Industry

Shell wants alternative funding for Nigeria’s JV Cash Call

*Osagie Okunbor, Managing Director, SPDC, and Country Chair, Shell Companies in Nigeria.

OpeOluwani Akintayo

04 July 2018, Sweetcrude, Abuja — Shell Petroleum Development Company of Nigeria Ltd, has called on the federal government to do all to sustain the current alternative funding of the Joint Venture, JV Cash Call.

The firm’s Country Chair and Managing Director, Osagie Okunbor made the call while speaking with SweetcrudeReports on Wednesday in Abuja.

According to him, the funding arrangement needs to be sustained to uphold the contract between International Oil Companies, IOCs, and Nigeria.

Although Mr. Okunbor commended the state-owned firm, Nigerian National Petroleum Corporation, NNPC for not owing any debt on Cash Calls in the past one year, however, he urged the federal government to pay up the debts already on the ground.

“NNPC no longer owes cash calls at least for the past one year, and that naturally, increases the appetite for investments in the sector,” he said.

“The alternative funding for the agreement must be sustained for continuity of growth in the sector”.

“Yes, we all are clamouring for PGIB to be passed but not a PIGB that doesn’t support investments,” he added.

Corroborating his point, NNPC’s Group Managing Director, Maikanti Baru represented by the Chief Operating Officer, Upstream, Engr. Bello Rabiu, said NNPC is ready to make the JV work, calling on the corporation not to suspend payment of cash calls, adding that the sanctity of contracts should be respected.

“The whole JV platform must be maintained. We must all make sure it works, and I urge NNPC not to suspend payment of cash calls because the sanctity of contracts must be respected,” he said.

Earlier in the year, the Nigerian Governors’ Forum, NGF queried the spending of NNPC and asked it to clarify its expenses.

Chairman of the Forum and Zamfara State Governor, Abdul’Aziz Yari, stated this on behalf of his colleagues after they met in Abuja, the nation’s capital, saying the forum was concerned about the implementation of the ‘cash-call agreement’ of the corporation.

The term describes a counterpart funding contract between the Federal Government and the multi-national oil companies, allowing the NNPC to invest about 60 percent of its equity.

The NGF Chairman, however, disclosed that the governors resolved to suspend the payment of cash-call, and payment of all arrears until the NNPC clarifies its spending.

According to him, the decision was taken because the corporation could not ascertain the actual figure of debt paid so far.

However yesterday in Abuja, NNPC said it plans to raise funds from the stock market to finance oil projects across the country.

The Minister of State for Petroleum Resources, Ibe Kachikwu, and Baru said the projects include the NNPC and Nigeria Agip oil company joint venture, south gas project, north gas project and central gas project, among others.

He said that government has issued an updated oil and gas policy as well as initiated the process for enacting a new petroleum industry governance bill that explains government institutions and their roles in the industry.

The NNPC had earlier signed financing agreements of about 2.5 billion dollars for different projects.

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