Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has urged the Federal Government to pay up its counterpart fund (cash call) in the Nigerian National Petroleum Corporation (NNPC) Joint Venture (JV) operations with the oil firms, claiming non-payment is negatively affecting their operations.
Speaking in Lagos on the government’s inability to fund JV operations and unpaid arrears of cash calls, its Public Relations Officer, Emmanuel Ojugbana, said the JV between the NNPC and international oil companies (IOCs) accounted for more than 60 per cent of Nigeria’s crude oil production.
Ojugbana said: “The JV structure is an average of 55 per cent for the NNPC and 45 per cent for private oil companies. Unfortunately, despite the fact that NNPC has a larger chunk of the proceeds from the JVs, it has always been defaulting in payment of its own counterpart funding of projects. Exploration has been greatly recessed by the challenge of funding the operating budget and cash call obligations. Over 50 per cent cut in JV funding and irregular release of cash call has made the operators to scale down on the whole spectrum of the E&P operations.
“Oil companies are owed billions of dollars in cash call arrears putting the jobs of our members and other workers in the industry in jeopardy as companies easily rationalise disengagement of staff and reduction in welfare packages as being due to lack of funds based on outstanding funding arrears.’’
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