NNPC Reviews JV Funding

September 6, 2016

nnpc tower1

By Dipo Olowookere

The Nigerian National Petroleum Corporation (NNPC) has reiterated its resolve to exert energy in exploring oil in the Chad basin.

The NNPC said it was also exploring measures to deal with the intractable Cash Call challenges as it said that funding of Joint Venture (JV) Operations should be the first line to ensure sustainable oil production and reserve growth.

At a meeting of former Group Managing Directors of the NNPC, chaired by current GMD of the agency, Dr Maikanti Kacalla Baru, critical decisions were reached with the aim of moving the oil sector forward.

The meeting endorsed Mr President’s steer for sustaining exploration activities in the frontier basins particularly the ongoing efforts in Chad Basin and the Benue Trough.

The meeting advised the GMD to pay priority attention to the Chad Basin where promising prospects are recorded.

Dr Baru and the former GMDs jointly reviewed the current state of Nigeria’s Oil & Gas Industry, deliberated on ways to resolve issues militating against the progress of the sector and recommended measures to move the sector forward.

During the brainstorming session, they expressed serious concerns on the declining production level and its attendant consequences on the environment and the nation’s revenue.

They further agreed that if the current situation remains unchecked, it could lead to the crippling of the Corporation and the nation’s Oil & Gas Sector, the mainstay of the Nigerian economy.

At the meeting it was agreed that the refineries be rejuvenated using the Original Equipment Manufacturers (OEMs) and that the refineries must be restructured to operate as an Incorporated Joint venture (IJV) similar to the Nigerian Liquefied Natural Gas (NLNG) model with credible partners having requisite technical and financial capabilities.

The NNPC was also commended for resolving the fuel supply crisis and urged the Corporation to emplace measures that will ensure sustenance of seamless supply of petroleum products nationwide.

The meeting noted that the PMS price cap of N145/litre is not congruent with the liberalization policy especially with the Foreign Exchange rate and other price determining components such as crude cost, Nigerian Ports Authority (NPA) charges etc remaining uncapped.

They also noted that for effective functioning of any National Oil company (NOC), the technical components of the country’s Exploration & Production (E & P) must be integrated as part of the country’s NOC and therefore posited that NAPIMS being the technical component of Nigeria’s E & P, and not just an investment vehicle, must remain with and managed by NNPC. Taking NAPIMS out will make NNPC an ineffective NOC.

They argued that current Petroleum Industry Bill (PIB) which proposed the incorporation of NAPIMS and taking it out of the NNPC will inhibit the effective functioning of the NNPC as a National Oil Company (NOC).

Dipo Olowookere

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

Mr Olowookere can be reached via [email protected]

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