With Nigeria finding it increasingly difficult to meet its obligations towards financing oil and gas industry operations due to drop in global crude oil prices, the federal government says it is considering raising funds from international investors and the private sector for the Joint Venture, JV, cash calls in 2016.
Cash call is the financial contributions by the Nigerian National Petroleum Corporation, NNPC, and its six multinational joint venture partners to their oil and gas annual operations.
The JV partners include Shell Petroleum Development Company of Nigeria, SPDC; ExxonMobil Corporation; Chevron Nigeria Limited, CNL; Total Nigeria; Nigeria Agip Oil Company, NAOC and Pan Ocean Oil Company.
The Minister of State for Petroleum Resources, who doubles as the Group Managing Director of the NNPC, Ibe Kachikwu, said in Vienna, Austria during the Organisation of Petroleum Exporting Countries, OPEC, conference that high level discussions were already on with local and international investors to bridge the perennial JV cash call funding gap.
Mr. Kachikwu said the initiative was aimed at removing the burden of funding capital intensive projects in the upstream sector of the oil and gas industry from the federal government.
He said in the years ahead, the NNPC would privatize the country’s over 5,000 kilometres of pipelines network in order to enhance its efficient management, to bring to the barest minimum the high incidence of vandalism of the infrastructure in the petroleum sector.
The minister said in the next 24 months, Nigerians would see a positive and dramatic turnaround in the country’s refineries, pointing out that going forward the new refinery model that would be introduced would not only meet the country’s petroleum products need, but also that of the West African sub-region.
“The new model is that refineries would now buy their own crude oil; refine it and make remittances to the Federal Account Allocation Committee.
“The refineries would operate a semi-autonomy system that would enable them to run in a profitable manner,” Mr. Kachikwu said.
Shortly after assumption of office early this year, Mr. Kachikwu had given the refineries a 90-day ultimatum that would lapse by December, 2015 to fast-track the repairs and restoration of production.
At the moment, the latest monthly report by the NNPC for October showed that none of the three refineries in Kaduna, Port Harcourt and Warri was currently functional.
But, Mr. Kachikwu said available reports to him had confirmed that two of the refineries were likely to meet the December deadline to re-stream operations.
NNPC operations, he pointed out, were now being handled transparently and efficiently, with publication of its monthly accounts, to inspire investors’ confidence and improve the perception index of the corporation in a positive light in the eyes of the global community.
The minister said in order to set the template for best global environmental practices for all International Oil Companies, IOCs, operating in Nigeria, a “Clean Nigeria after Oil Initiative” would be introduced in 2016.
The initiative, he explained, would guarantee the sustenance of the “flora and fauna” of communities where the oil companies operate even after they were long gone from the Nigeria.
“I will engage the IOCs to stand up and get counted in the area of best environmental practices in 2016.
“This initiative would help the IOCs to maintain a cordial relationship with the communities where they operate and the communities too would be satisfied with the efforts at the end of the day,” Mr. Kachikwu said.