Oscarline Onwuemenyi
29 September 2016, Sweetcrude, Abuja – The Nigerian National Petroleum Corporation (NNPC) has announced that it is planning to pay its Joint Venture Cash (JVC) call arrears owed multinational oil companies.
The NNPC said it would ensure that outstanding and future payments were liquidated from oil and gas royalties and taxes under a first line charge model.
The country has been having difficulties in meeting its JV cash call obligations. For instance, of the N90.82 billion receipt from crude oil in July this year, N61.62 billion was transferred to JV cash call, which is a first line charge, to guarantee continuous flow of revenue stream to the Federation Account.
The Group Managing Director of the NNPC, Dr. Maikanti Kacalla Baru, made plans of the corporation known during a visit to the National Petroleum Investment Management Services (NAPIMS), a statement issued by the NNPC spokesman, Garba Deen Muhammad, said.
Baru noted that the current JV payment structure requires urgent review, adding that the new model being proposed by the NNPC would enable the Corporation plough back profit and grow the oil and gas business in the upstream for the benefit of all stakeholders.
He also promised to reposition the National Engineering and Technical Company (NETCO) into an African hub of excellent engineering, procurement, and construction company of choice.
Cash calls are each partner’s (NNPC and Shell, Mobil or Total e.t.c) share of the operating and capital expenses contributed to fund oil activities.
The NNPC, in its July operations report, said it had transferred the sum of $3.16bn oil proceeds to fund JVC call in the last one year. JV funding had been one of NNPCs major challenges with the arrears now totalling over $6bn.
But the Minister of State for Petroleum Resources, Dr. Emmanuel Kachikwu, recently, said that a process of paying the arrears was jointly created.
