The CUIO, NNPC Upstream Investment Management Services (NUIMS) further said, “As a matter of fact, our worst moment in the industry has gone and it is time for us to make significant progress, by growing the Nigerian economy through massive investment in the oil and gas sector.
The Nigerian Government has revealed the plan to clear the outstanding balance of cash call debt it owed five International Oil Companies (IOCs) -its joint ventures partners- being the remaining amount left to settle all the negotiated $5.1 billion it owed the partners under upstream production arrangement.
Mele Kyari, Group Chief Executive Officer (GCEO) Nigerian National Petroleum Company Limited (NNPCL) and Bala Wunti, Chief Upstream Investment Officer (CUIO), NNPC Upstream Investment Management Services (NUIMS), confirmed this in their presentations during the Nigerian Oil and Gas Opportunity Fair (NOGOF), organised by the Nigerian Content Development and Monitoring Board (NCDMB), in Yenogoa, Bayelsa State.
EnergyDay gathered that the Nigerian Government through the NNPCL holds a 55 percent to 60 percent share of investment in the upstream joint ventures, to the Mobil, Chevron, Shell Petroleum Development Company (SPDC), Total Energies, and Nigerian Agip Oil Company (NAOC). The cash calls arrangement was in the light of anticipated future capital, operating expenditures, or the need for additional capital contributions, which has been in place for over 40 years.
Kyari in his remark at NOGOF, said that all the outstanding cash calls has been paid to the JVs partners, this according to him was achieved as a result of recoveries made over the last few years and based on the level of success achieved in the war against all the oil thieves and vandals in the Niger Delta.
He said, “We have grown production from about 1.1 million barrels per day(bpd) at the end of last year to almost 1.6 million bpd as at March 2023.
“It is also important to note that about 45 percent of the revenue that is available to all tiers of government is generated from sales of crude oil and gas. This is also including part of the cash used to finance infrastructure across the country,”the NNPC’s GCEO said.
Wunti on his part disclosed the government has fulfilled its obligations to the JV partners by clearing all outstanding cash calls with just a little outstanding which will be settled by Friday, May 19, 2023.
He further stated that the cash call default brought about significant challenges for the industry of all the operating companies to the extent that most of them could not settle their service providers and workers’ salaries.
He further hinted that the country’s inability to produce maximally and attract investment led to complicated the cash calls default, adding that this also contributed in no small measure to the capacity of both operating and non-operating partners to commit funds to host community development.
Mr. Wunti said, “We have been able to settle our cash calls because of production recovery, more importantly, we have got what we consider a license to continue to do what we need to do in terms of commitment to the market and that has helped us to grow production level to a budget estimate.
“Our trajectory is backed by my bankable opportunities for most of the projects that are ongoing and under construction some of which are now attached to FID.
“This, therefore, means that there is going to be significant activity in the oil industry, and this will bring about.
“The investors should brace up. NNPCL is ready to work with all our partners to add value to the oil and gas industry,” Wunti said.
The NNPC’s CUIO, therefore, noted that as a result of the country’s ability to complete the settlement of all its cash calls, NNPC has overcome all its challenges.
He said, “We are doing on average 1.6 million barrels per day output volume. This is just the beginning, with the exiting of the introduction of the Petroleum Industry Act.”
Osagie Okunbor, Managing Director of Shell, on his part, confirmed the settlement of the cash calls by the NNPCL. He noted this the new development would improve operation in upstream.