Government may exit $712.46b monthly joint venture funding

Indications emerged yesterday, that from August this year, the Federal Government may hands off from Joint Venture (JV) cash call and allow International Oil Companies (IoCs) to embark on self-funding of oil and gas activities.

The Nigerian National Petroleum Corporation (NNPC) had said in its monthly financial report that 2016 budget requires monthly funding of about $712.46 million to JV cash calls.

Speaking yesterday at the Uyo Town Hall meeting organised by the federal ministry of information and culture, the Minister of State for Petroleum Resource, Dr. Ibe Kachikwu, said that government was finalizing negotiation to exit from financing cash calls.

 According to NNPC, JV funding, which is a first line charge to Federation Account, has gulped all the export proceeds from March last year to April this year.

Specifically, Nigeria’s total oil and gas export receipt for the period of March 2015 to April 2016, which stood at $3.8 billion, was transferred to fund JV cash call for the period.

Kachikwu explained, “Hopefully from August, we will get to a point where the Nigeria government may no longer pay JV cash calls. Government can keep its money to develop states, while oil companies find money to finance oil exploration like it is done in other parts of the world.”

Kachikwu lamented that the effects of pipelines vandalism, especially in the Niger Delta would be with the country for 15 to 20 years to get those infrastructures and those climatic effects on the environment to go away.

He disclosed of government intention to establish an oil depot in Akwa Ibom:

 “I think Akwa-Ibom deserves to have a depot. I’m talking with those who are producing oil here to begin to look at the possibility of modular refineries.

Modular refineries are going to be the answer to our problems in the future. We talk about the militants and their agitations, the reality is that until we begin to put things in place that would have these so called ‘militants’ find opportunities in the sector, the destruction is going to continue.”