The cash call arrears owed oil companies by the Federal Government have swollen to over $8.5bn (N2.6tn), a development that has seen the government making moves to exit the Joint Venture cash call system.
The Group Managing Director, Nigerian National Petroleum Corporation, Dr. Maikanti Baru, disclosed this on Tuesday at the Nigerian Association of Petroleum Explorationists’ 34th Annual International Conference and Exhibition in Lagos.
The nation’s oil and gas production structure is split between JV onshore and in shallow waters with foreign and local companies, and Production Sharing Contracts in deep water offshore.
The NNPC owns between 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.
“In 2016 alone, underfunding of the NNPC cash calls is estimated to be about $2.5bn. This is aside the inherited arrears estimated at over $6bn,” Baru said.
He noted that the chronic JV funding shortfalls being experienced in the industry had resulted in declining JV oil production from about one million barrels of oil per day three to five years ago to about 800,000 bpd.
Source: http://www.entertainmentnewsnigeria.com/
