The Nigerian National Petroleum Corporation, NNPC is set to work out modalities that would enable it exit Joint Venture cash call arrears by ensuring that outstanding and future payments are liquidated from oil and gas royalties and taxes under a first line charge model.
The Group Managing Director of the NNPC, Dr Maikanti Kacalla Baru, made plans of the corporation known during a visit to the National Petroleum Investment Management Services (NAPIMS), a statement issued by the NNPC spokesman, Garba Deen Muhammad, said.
The NAPIMS is the corporate service unit of the corporation in charge of federal government portfolios in the upstream sector. Cash calls are each partner’s (NNPC and Shell, Mobil or Total e.t.c) share of the operating and capital expenses contributed to fund oil activities.
The NNPC, in its July operations report, said it had transferred the sum of $3.16bn oil proceeds to fund JVC call in the last one year. JV funding had been one of NNPCs major challenges with the arrears now totalling over $6bn.
But the Minister of State for Petroleum Resources, Ibe Kachikwu, recently, said that a process of paying the arrears was jointly created.
Baru agreed that the current JV payment structure needed review, adding that the new model proposed by the NNPC would enable the corporation to plough back the profit and grow the oil and gas business in the upstream for the benefit of stakeholders.
He also promised to reposition the National Engineering and Technical Company (NETCO) into an African hub of excellent engineering, procurement and construction company of choice. Baru said during a maiden Town Hall meeting with management and staff of NETCO at its headquarters in Lagos that NETCO had delivered profit to the NNPC.
