The Nigerian National Petroleum Corporation has said 86 per cent of the oil and gas receipt from January to November last year was used to fund joint ventures which it has with other oil firms.
The nation’s oil and gas production structure is majorly split between joint ventures with NNPC onshore and in shallow water, and production-sharing contracts in deepwater offshore.
There are several joint ventures between the NNPC and international oil companies, including Shell, ExxonMobil, Chevron, Total and Eni.
The NNPC owns between 55 per cent (for JVs with Shell) and 60 per cent (for all others) and the JVs are jointly funded by the oil majors and the government through NNPC.
Over the years, the NNPC has been unable to meet its share of cash calls for the joint ventures.
Cash calls are requests for payment for anticipated future capital and operating expenditures, sent by joint venture operators to non-operating partners.
The NNPC, in its latest monthly report released late last week, said the total export receipt for November fell by $43.24m or 9.7 per cent from the $445.79m earned in October.
The corporation attributed the decline in November revenue to an 11 per cent drop in export lifting relative to previous month lifting.
It said, “Total export crude oil and gas receipt for the period of January – November 2015 is $4.54bn. Of the total receipts, the sum of $0.61bn was remitted to Federation Account while the balance of $3.94bn was used to fund the JV cash call for the period. Thus JV funding has gulped more than 86 per cent of the proceeds.”
According to the NNPC, the deterioration in crude oil and gas receipt is in response to continued decline in oil price.
“Thus the proceeds are no longer sufficient to service the JV cash call obligation and remit to Federation Account. JV cash call is a first line charge to Federation Account and 2015 Approved Budget requires monthly funding of about $615.8m. NNPC is therefore mandated to sweep all the export receipt to JV cash call funding implying a zero remittance to Federation Account,” the corporation said.