NNPC owes oil companies a staggering N2trn in cash call arrears

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr Maikanti Baru, has stated that the corporation owed oil companies cash call arrears for the development of joint venture assets totalling $6.6bn— about N2.01tn.

Baru disclosed this on Monday at the inauguration of the reconstituted NNPC Anti-Corruption Committee in Abuja, according to a statement.

He said, “We have to pay our arrears of about $6bn incurred pre-2016 and we are also paying up a tranche of about $1bn 2016 arrears. We started in April 2017 with the payment of $400m and we will pay the balance before the anniversary of the first payment.”

Baru stated that the four major investments the NNPC recently embarked upon with key upstream JV partners were capable of providing incremental revenue to the national treasury by over $30bn within the next 10 years.

He argued that the investments, which attracted close to $3.8bn in foreign direct investments, would serve as a vehicle to fast-track the prevailing post cash-call exit era.

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Listing the JV alternative financing upstream investments, Baru said they included the $1.2bn multi-year drilling for 36 offshore/onshore oil wells under the NNPC/Chevron Nigeria Limited, and the NNPC/First E&P JV and Schlumberger tripartite $800m alternative funding agreement for the development of the Anyalu and Madu fields in the Niger Delta.

Others were the agreements executed in London last week for the $1bn NNPC/SPDC JV Project Santolina and the NNPC/Chevron $780m Project Falcon on Sonam, hitherto financed through the JV cash call.

He said, “These four projects alone are going to raise incremental revenues to Nigeria of over $30bn over the life of the projects in less than 10 years. They will also serve as part of the vehicle for exiting the JV cash calls.”

On the anti-corruption campaign of the corporation, Baru said the group had a long history in that regard, tracing the NNPC’s involvement in the fight against corruption to the year 2000 when the Federal Government directed all its ministries, departments and agencies to establish in-house anti-corruption committees.

He said the NNPC was the first to set up a committee within a month, precisely in October 2000, with him as the then chairman.

The new committee being inaugurated is headed by Mr. Mike Stanley Balami, a group general manager in the finance and account directorate.

Some some industry watchers and reform advocates have continued to call for a complete overhaul of the NNPC, allowing for full privatization which they believe to be the only lasting solution to the corporation’s scandal-ridden existence.

They will find Baru’s words about the corporation’s history of combating corruption shocking, recollecting all the many scandals that the corporation has been responsible for in its long and chequered history.

 

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