NNPC Repays $2.3bn JV Cash Call Arrears

• NNPC Repays $2.3bn JV Cash Call Arrears

The Nigerian National Petroleum Corporation has so far repaid $2.3bn cash call arrears to its Joint Venture partners.

Nigeria’s oil and gas production structure is split between JV (onshore and in shallow waters) with foreign and local firms and Production Sharing Contracts in deep water offshore.

The NNPC owns 55 per cent of the JVs with Shell, and 60 per cent of all the others and the JVs are jointly funded by the private oil companies and the Federal Government through the corporation.

In his valedictory speech at the corporation’s headquarters on Monday in Abuja, as he officially exited the office of NNPC’s Group Managing Director, Maikanti Baru, stated that the payment of cash call arrears was one of the achievements of his team.

He, however, noted that the payment of cash call arrears was the least in the minds of state governors during his days as NNPC GMD.

Speaking on what his team achieved, as spearheaded by the oil firm’s erstwhile Chief Financial Officer, Isiaka AbdulRazaq, the immediate past NNPC boss stated that the former CFO “championed the cash call exit repayment process of $5bn arrears of the JV through incremental production.

“He (AbdulRazaq) obtained Federal Government approval and instituted the self-funding model. So far $2.3bn has been paid (47 per cent of the total amount outstanding) and on 4th July 2019, the cash call arrears repayment of ExxonMobil was realised.”

Baru added, “He ensured that our salaries and up-front payments were done before or on the 25th of every month even during the economic downturn and recession. We closed the pension gap of over N198bn.

“Delivered the updated audited financial statements of NNPC to date – all the seven years backlog from 2010 have been cleared. Syndicated financing for JV and NPDC assets – we raised funding in excess of $10bn despite the tight international lending market.”

The former GMD also noted that his team promoted transparency through the regular and consistent monthly publication of the NNPC Operations and Financial Reports.

Baru, who was the 18th GMD of NNPC, gave a long valedictory speech and pointed out that the payment of cash call arrears was the least on state governors’ minds.

According to him, the governors always wanted every kobo made by NNPC to be shared, without minding the need to service the debts arising from cash call arrears for the Joint Ventures.

Baru described his 1,099 days stay in the office as the GMD eventful and that he had done his best to put the corporation on the path of recovery and sustainable growth.