NNPC Spends N1.53tn On JV Oil Assets

The Nigerian National Petroleum Corporation spent a total of N1.53tn on oil and gas assets.

The asset is being developed through joint ventures with private firms as well as priority projects in 2020.

NNPC represents the Federal Government in the JVs having an obligation to make cash call payment for the development of the assets.

The nation’s oil and gas production structure is majorly split between the JV (onshore and in shallow waters) and the Production Sharing Contracts in deepwater offshore.

Under the JV arrangement, both the NNPC and the private firms contribute to the funding of operations in the proportion of their equity holdings and generally receive the produced crude oil in the same ratio.

 Breakdown Analysis

The NNPC transferred $1.5bn (N568.5bn) to JV cash call account as first line charge last year, while N963bn went to JV cost recovery and government priority projects, according to data obtained from the corporation.

The money expended on the JV assets and the priority projects were taken from the proceeds from oil and gas exports and sale of domestic oil and gas.

However, the country’s revenue from the export of crude oil and gas fell to $2.62bn in 2020 from $4.85bn in 2019 according to NNPC.

The proceeds from the sale of domestic crude oil and gas stood at N1.54tn in 2020, down from N1.57tn in 2019 while total export receipt of $108.75m was recorded in January 2021 as against $125.25m in December 2020.

It said proceeds from crude oil amounted to $24.32m while gas and miscellaneous receipts stood at $66.28m and $18.15m respectively.

“Of the export receipts, $28.43m was remitted to the Federation Account while $80.32m was remitted to fund the JV cost recovery for the month of January 2021 to guarantee current and future production.

“Total export crude oil and gas receipt for the period January 2020 to January 2021 stood at $2.73bn; out of which the sum of $1.58bn was transferred to JV Cash Call as first line charge and the balance of $1.15bn was paid into Federation Account”, the corporation said.

“In January 2021, NNPC remitted the sum of N163.63bn to the Federation Account Allocation Committee. From January 2020 to January 2021, total NNPC remittances to FAAC is N2.10tn; out of which Federation and JV with government priority projects received the sum of N850.63bn and N1.04tn respectively,” it said. 

Kehinde Ogunyale

Reporting on the data-driven economy, and investigations.

Related post