By Modupe Gbadeyanka
National Economic Council (NEC) has aborted the onerous cash call regime for the oil and gas industry in Nigeria.
It has now approved an alternative system of funding for the industry.
This decision was reached at the NEC meeting presided over by the Vice President, Professor Yemi Osinbajo, on Thursday in Abuja.
Minister of State for Petroleum, Mr Ibe Kachikwu, who briefed State House Correspondents after the meeting, explained that the new approved funding regime will eliminate the often arduous and onerous cash call regime, which has stalled growth in the industry.
According to him, “The current upstream joint venture arrangement in Nigeria’s oil and gas industry is unincorporated, meaning that NNPC and the International Oil Companies (IOC’s) partner in each joint venture as unique and separate.”
Mr Kachikwu said from January to November 2016 under-funding of the NNPC cash calls is estimated at $2.3 billion.
This is in addition to the inherited arrears estimated at $6.8 billion for 2015 year ending.
It would be recalled that the alternative funding stream had been approved earlier this week at the Federal Executive Council (FEC) meeting on Wednesday and then presented to NEC on Thursday as the body mandated to come up with measures necessary for the coordination of the economic planning efforts of the various governments of the federation.
Adedapo Adesanya