Commission fails in $3.3bn payment to JV partners

ayodele johnson

February 11, 2016 9:17 AM

NNPC was only able to pay $4.13bn to the JV partners as against $7.39bn approved to be paid for last year for the development of the assets

Minister of State, Petroleum Resources and Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Dr. Ibe Kachikwu.

The Nigerian National Petroleum Corporation (NNPC) has flopped in its obligations to joint venture partners in 2015.

According to Punch News, the NNPC was only able to pay $4.13bn to the JV partners as against $7.39bn approved to be paid for last year for the development of the assets.

The Managing Director, Degeconek Nigeria Limited, Mr. Abiodun Adesanya said, the country needed a right mix of policies and funding to grow its oil reserves to 40 billion barrels and grow production to three million barrels per day.

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He said, said the 53 per cent drop in NNPC cash calls payment to JV operators between 2005 and 2015 led to a 62 per cent drop in JV production that is masked by PSC production.

“Operators should focus on managing their financial position, optimising capital (debt versus equity mix; managing tax and corporate structure; renegotiating fiscal policies for optimal benefits where possible; and they could also divest asset to generate cash flow,” Adesanya said.

According to the NNPC, total export crude oil and gas receipt for last year is $4.74bn, of which the sum of $0.61bn was remitted to Federation Account while the balance of $4.13bn was used to fund the JV cash call for the period.

ayodele johnson