The Nigerian National Petroleum Corporation (NNPC) revealed that its Joint Venture (JV) payment structure necessitates an urgent review, stating that, oil and gas royalties and taxes would be used in liquidating outstanding and future JV cash call arrears, Vanguard reported.
NNPC’s Managing Director, Maikanti Baru, revealed that the corporation is working out models that would enable it to exit JV cash call arrears. He added that the new model would allow companies to invest back the profits and grow the oil and gas business in the upstream sector, according to Punch.
JV cash call payments, a significant obligations of the NNPC, made it impossible for the corporation to make dollar payments to Nigeria’s Federation Account, due mainly to the weakening in the price of crude oil and diminished crude oil production.
Accordingly, the NNPC is said to owe its JV partners, several billions of dollars in outstanding arrears. NNPC’s monthly report stated that from August 2015 to July 2016, the corporation had paid $3.163b to its JV partners for its JV cash call obligation.