Group picks hole in NNPC’s JVs cash call payments
An anti-graft group called Reality Advocacy Against Corruption (RAAC) alleged that the Nigerian National Petroleum Corporation(NNPC) has refused to quit payment of cash-call to its Joint Venture (JV) partners despite FG’s directive.
Cash-call has been an instrument used by the NNPC to provide funding for the operations of its JV obligations with other oil companies particularly, the International Oil Companies (IOCs).
In a statement obtained by EnergyDay, the group through its Chairman, Chief Fidelis Uzonwanne,alleged that about N100 trillion has been lost in the oil sector to mismanagement of funds, questioning NNPC’s justification for continuing with the payment of cash-calls to its partners despite directive by President Muhammadu Buhari to quit the cash call arrangement.
The Group said, “Even when Mr President gave instruction to NNPC to quit payment of Cash Call to IOCs since January 2017, the Corporation ignored the directive and has continued to pay over $8 billion every year, even with drastically reduced contribution from JV Companies. What NNPC uses the Federation crude to pay for does not pass through Legislative Budgetary Approvals,” the group said.
Check by EnergyDay, revealed that the Presidency had in 2016 and in the 2017 budget speech, stated that provisions for payment of Joint Venture cash-calls will no longer be available for the NNPC effect from January, 2017.
The group however accused the NNPC of using proceeds from sales of the county’s crude to pay for JV Arrangements which it described as contributing “so little” to the oil and gas sector, through the bypass of Legislative Budgetary Approvals.
“With this mismatch of crude oil allocation and production, NNPC commandeers the remaining crude and channels same to Domestic Crude Oil under the cover of providing petroleum products for the country.
“NNPC which should pay for its Domestic Crude purchases refuses to do so. Instead, it disburses it as Joint Venture Cost Recovery, Subsidy/Under-recovery and Special Projects. This has resulted in minimal and at times zero remittances to FAAC in some months,” it further stated.
Meanwhile EnergyDay has gathered as at April 6, 2022, the Corporation has paid a total of $3.68billion out of the $4.689bn cash call debt owed to five international oil companies including Mobil Producing Nigeria, Chevron Nigeria Limited, Shell Petroleum Development Company, Total Exploration and Production Nigeria, and Nigeria Agip Oil Company, its JV partners.
The data of the cash call debt payment obtained from the Corporation’s website revealed that the debt of Mobil Producing Nigeria and Chevron Nigeria Limited have been completely paid while Shell Petroleum Development Company, Total Exploration and Production Nigeria, and Nigeria Agip Oil Company are still being owed about $1.01bn as at December 31, 2021.
Garba Deen Muhammad, the Corporation’s spokesperson was not available to offer reaction on the matter as at period of going to press.