NNPC plans zero JV cash call funding for government

The Nigerian National Petroleum Corporation (NNPC) has begun shielding the Federal Government from Joint Venture (JV) cash call indebtedness, which presently stands at $6 billion.

It plans to achieve this by ensuring outstanding and future payments are liquidated from oil and gas royalties and taxes under a first line charge model.

The country has been having difficulties in meeting its JV cash call obligations. For instance, of the N90.82 billion receipt from crude oil in July this year, N61.62 billion was transferred to JV cash call, which is a first line charge, to guarantee continuous flow of revenue stream to the Federation Account.

The Group Managing Director (GMD) of the NNPC, Dr. Maikanti Kacalla Baru, made the disclosure, yesterday, during a one-day working visit to the National Petroleum Investment Management Services (NAPIMS), a Corporate Service Unit of the Corporation in charge of Federal Government portfolios in the upstream sector.   

Baru noted that the current JV payment structure requires urgent review, adding that the new model being proposed by the NNPC would enable the Corporation plough back profit and grow the oil and gas business in the upstream for the benefit of all stakeholders.