Nigeria formally ended the era of cash call payment by the joint venture (JV) operators in the oil and gas industry, informed Premium Times.
The government’s inability to meet its cash call obligations to the joint venture over the years was identified as one of the challenges responsible for the lack of growth in the country’s oil and gas industry.
Nigeria’s Minister of Finance, Kemi Adeosun, said the Nigerian National Petroleum Corporation (NNPC) has spent $360m on cash calls for the month of September, which reduced the country’s income from oil production that reached over $130m, Ventures Africa reported.
As of January, about $5.5b cash call arrears had not been paid to international oil companies, while $1.1b is owed to the indigenous companies.
Evolving a new funding mechanism for the joint venture operations was part of the focus of the reforms undertaken by Nigeria to eliminate the often difficult cash call regime, enhance the efficiency of the management of oil and gas resources and guarantee growth.