Government may exit $712.46b monthly joint venture funding
The Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu
• Effect of pipeline vandalism to last 15 to 20 years, says Kachikwu
Indications emerged yesterday, that from August this year, the Federal Government may hands off from Joint Venture (JV) cash call and allow International Oil Companies (IoCs) to embark on self-funding of oil and gas activities.
The Nigerian National Petroleum Corporation (NNPC) had said in its monthly financial report that 2016 budget requires monthly funding of about $712.46 million to JV cash calls.
Speaking yesterday at the Uyo Town Hall meeting organised by the federal ministry of information and culture, the Minister of State for Petroleum Resource, Dr. Ibe Kachikwu, said that government was finalizing negotiation to exit from financing cash calls.
According to NNPC, JV funding, which is a first line charge to Federation Account, has gulped all the export proceeds from March last year to April this year.
Specifically, Nigeria’s total oil and gas export receipt for the period of March 2015 to April 2016, which stood at $3.8 billion, was transferred to fund JV cash call for the period.
Kachikwu explained, “Hopefully from August, we will get to a point where the Nigeria government may no longer pay JV cash calls. Government can keep its money to develop states, while oil companies find money to finance oil exploration like it is done in other parts of the world.”
Kachikwu lamented that the effects of pipelines vandalism, especially in the Niger Delta would be with the country for 15 to 20 years to get those infrastructures and those climatic effects on the environment to go away.
He disclosed of government intention to establish an oil depot in Akwa Ibom: “I think Akwa-Ibom deserves to have a depot. I’m talking with those who are producing oil here to begin to look at the possibility of modular refineries.
“Modular refineries are going to be the answer to our problems in the future. We talk about the militants and their agitations, the reality is that until we begin to put things in place that would have these so called ‘militants’ find opportunities in the sector, the destruction is going to continue.”
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5 Comments
I support the establishment of Oil depot and modular refineries in Akwa Ibom State. God bless Nigeria
The oil and gas exploration activity is just about to go belly up.
I doubt if any oil and gas company will want to invest its money in an area riddled with so much physical obstacles and human propensity for wanton destruction..
Good talk on modular refineries for the country. But there was to be one of such sited in Eket/Nsit Ubium axis of the state by an indigene based in The US during the immediate past regime. Perhaps we should ask the king pins why that refibery was not allowed to take off and we allow the foreign fabricated equipment meant to set up the refinery to rot away just like that. This is how the nation has degenerated to and so we should do something now to stem the tide and support the government of the day establish people oriented projects, where they matter most to the people.
This is exactly what is needed. now stop talking and begin to implement. JV should have being made publicly traded companies, so they can source for funding from the capital market. The government should only be in the business of collecting taxes, royalty and regulating the industry. All the JV should be formed into a public company, listed on NSE. The refineries should also be publicly traded companies, with the federal, state, LG, communities and workers owning shares. The rest should be sold to investors.
Dr. Kachikwu about time someone decided to take the bull by the horns. The jvs really only benefit the IOC’S. The cost to the country has been unquantifiable. One sided agreements that have not helped us develop or grow in anyway. Maybe if funds are raised through the capital market, just as was done in the 1970’s with privatisation, then all Nigerians will have the oppurtunity to feel part of the oil sector..
We will review and take appropriate action.