24 July 2015, Lagos – The Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, has called on the Federal Government to pay up its counterpart fund (cash call) in the Nigerian National Petroleum Corporation, NNPC Joint Venture, JV, operations with the oil companies, claiming non-payment is negatively affecting the operations of the JV.
Lamenting government’s inability to fund JV operations and unpaid arrears of cash calls, Public Relations Officer of PENGASSAN, Emmanuel Ojugbana, said the JV between the NNPC and oil companies presently accounted for more than 60 per cent of Nigeria’s crude oil production.
According to Ojugbana, “The JV structure is an average of 55 per cent for the NNPC and 45 per cent for private oil companies. Unfortunately, despite the fact that NNPC has a larger chunk of the proceeds from the JVs, it has always been defaulting in payment of its own counterpart funding of projects. Exploration activity has been greatly recessed by the challenge of funding the operating budget and cash call obligations. Over 50 per cent cut in JV funding and irregular release of Cash Call has made the operators to scale down on the whole spectrum of the E&P operations.
”Oil companies are owed billions of dollars in cash call arrears putting the jobs of our members and other workers in the industry in jeopardy as companies easily rationalize disengagement of staff and reduction in welfare packages as being due to lack of funds based on outstanding funding arrears.
“As workers in the industry and Nigerians, we are concerned about this perennial problem and demand that the Government should make funds available to clear cash call arrears owed to oil companies so as to restart stall projects as well as bring in new investments into the sector, which will translate to creation of more jobs in the industry. Once JV work programmes and budgets are approved, the government should adhere to it for the duration of the year, adding that there should be no cuts in the JV budget during the year when work programmes are already implemented as it has adverse effect on such JV operations.”
– Vanguard
