FG Paid N1.62 Trillion Cash Call in 11 Months – NNPC
Latest data from the Nigerian National Petroleum Corporation (NNPC) have shown that the Federal Government paid a total of N1.628 trillion in the joint venture cash call from January to November 2018. According to the corporation, the dollar allocation to the JV cash call account was $3.712 billion while the naira portion was N496.703 billion.
The nation’s oil and gas production structure is split between JV (onshore and in shallow waters) with foreign and local firms and Production Sharing Contracts in deep water offshore. The NNPC owns 55 per cent of the JVs with Shell, and 60 per cent of all the others, and the JVs are jointly funded by the private oil companies and the Federal Government through the corporation.
The Group Managing Director, NNPC, Dr Maikanti Baru, said in June last year announced that the corporation had settled all outstanding cash call arrears amounting to $5 billion, and that this had restored confidence in the country’s oil and gas industry.
In 2016, the international oil companies operating in Nigeria agreed to give the Federal Government a discount of $1.7 billion from the $6.8 billion cash call indebtedness of the NNPC to them.
The federation crude oil and gas lifting are classified into equity export and domestic, both of which are lifted and marketed by the NNPC and the proceeds remitted into the Federation Account. The equity export receipts, after adjusting for JV cash calls, are paid directly into Federation Account domiciled in Central Bank of Nigeria (CBN).
The NNPC said, “Total export receipt of $605.71 million was recorded in November 2018 as against $640.35 million in October 2018. Of the export receipts, $159.02 million was remitted to Federation Account while $446.70 million was remitted to fund the JV cost recovery for November to guarantee current and future production.
“Total export crude oil and gas receipt for the period November 2017 to November 2018 stood at $5.91 billion. Out of which the sum of $4.24 billion was transferred to JV cash call as the first line charge and the balance of $1.67 billion was paid into Federation Account.”
From the naira proceeds got from the sale of domestic crude oil and gas from November 2017 to November 2018, a total of N569.99 billion was transferred to the JV cash call account.
The NNPC recently said it had signed two sets of alternative financing agreements with NNPC/Chevron Nigeria Limited JV and NNPC/Shell Petroleum Development Company JV on JV projects.