Nigeria loses $3bn annually from NNPC JVs over N’Delta crisis

If the Nigerian government is able to resolve the Niger Delta crisis, the country will enjoy at least $3 billion cash call annually from the National Petroleum Corporation (NNPC) joint ventures with major oil firms.

However, as a result of the militancy in the oil producing region of the Niger Delta, which has scared off foreign partners from the various ventures and under-funding on the part of NNPC, Nigeria, by the end of third quarter has lost more than half of the projected government’s cash disposal.

Confirming this on Tuesday, the corporation’s Group Managing Director, Dr Maikanti Baru, said there will be relief on government if it had been able to source the NNPC operational funds estimated at $7-9 billion dollars annually.

“The Joint Venture (JV) cash call exit model that we are pursuing would have contributed 75 per cent to 85 per cent of the accruable revenues to government.

“The effect on NNPC contribution would have been minimized if it had gone as planned, though we are still working assiduously to kick start this from 1st January, 2017,” Baru said.

Read also: Panic withdrawals at Heritage Bank, despite CBN assurances

On the way out of the situation, the NNPC boss said unless those behind the militancy will listen to the appeal to stop the indiscriminate acts of infrastructure vandalism, the economy and energy goal of Nigeria will be unattainable.

But financial analysts reasoned that until Nigeria faces reality by suing for total peace within the oil producing region, as well as make efforts at diversifying its revenue base, currently having oil sector account for approximately 90 per cent of the nation’s foreign exchange earnings, there will be no early end to the recession.

They said there is nothing on the side of government indicating that it is willing to thread the path of unconditional peace towards ensuring that foreign interests return to the Niger Delta.

Expressing other concerns on the matter, Mr. Nosa Omorodion, President of the National Association of Petroleum Engineers, lamented the 45 per cent job losses that the oil and gas sector has had to suffer due to the unresolved crisis
By Emma Eke….

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