Lagos — Nigeria’s commitment to oil and gas Joint Venture, JV projects has dropped to a record low, SweetcrudeReports findings have shown.
The latest report by the state oil firm, NNPC says the federal government cut spending on such venture by approximately 62 percent in July.
The cut was necessitated by the ravaging Coronavirus pandemic which hit hard on earnings of mostly oil and gas producing nations, who at the peak of the crisis could not export much of their products as expected.
According to the Nigerian National Petroleum Corporation, NNPC latest report, cash call payment fell to $94.84m (N34.14bn) in July from $248.48m (N89.45bn) in June.
NNPC under the JV agreements with private oil and gas firms, makes part payments depending on its share, to fund projects. Produced crude oil from such arrangements are also shared depending on each party’s equity.
However, the Corporation said total export receipt of $122.44m was recorded in July as against $378.42m in June.
“Of the export receipts, $67.45m was remitted to the Federation Account while $54.98m was remitted to fund the JV cost recovery for the month of July 2020 to guarantee current and future production,” it added.
The report said in addition to the dollar allocation of $54.98m to the JV cash call account, the naira portion of N14.35bn ($39.86m) was transferred to the account from domestic crude oil receipts in July.
In June, the dollar allocation to the JV cash call account was $154.68m while the naira portion was N33.77bn ($93.80m), according to the report, adding that it remitted N70.15bn to the Federation Account Allocation Committee, FAAC.
The JVs accounted for 33.20 percent of the average daily production of 1.69 million barrels recorded in June, the report said.