Business
Senate oders probe of NNPC Joint venture cash calls
Nigerian Senate, Wednesday, mandated its Joint Senate Committee on
Petroleum (Upstream and Downstream), Finance and Appropriation to
immediately investigate joint venture cash calls by the Nigeria National
Petroleum Corporation, NNPC.
The directive by the Senate came after it expressed concern over
allegations that the NNPC had been violating rules governing its joint
venture cash call responsibility.
The upper chamber of the National Assembly also directed the committee to
come up with sanctions for any known violation of appropriation acts in the
oil and gas sector.
The decision of the Senate was arrived at after the adoption of a motion by
Senator Bassey Akpan (Akwa Ibom North-east).
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Akpan had in the motion, alleged persistent constraints by NNPC to meet its
cash call obligations, which he said had negatively affected the country’s
crude oil production output and other activities in the oil and gas sector.
According to Akpan, the current outstanding cash call obligations in the
oil and gas sector is $6bn, adding that cash calls ought to be treated as
first line items by NNPC before remittance of available balance on its
collectible revenues from crude sales to the federation account.
He also insisted that such revenues ought to be handled as approved by the
National Assembly.
According to him, it was worrisome that crude oil production from the joint
venture between the NNPC and IOCs had declined by 47 per cent as at the
last quarter of 2015 as a result of federal government’s inability to meet
its cash call obligation.
He also argued that it was illegal and unconstitutional for NNPC to spend
billions of dollars which he said ought to be used to settle joint venture
cash calls on “inconsequential administrative expenses.”
Akpan, in his submission said with the over N1tn approved by the National
Assembly as joint venture cash calls for 2016 fiscal year, the legislative
institution must ensure that it is adhered to as contained in 2016
Appropriation Act and Medium Term and Expenditure Framework
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