Speaking on the government’s inability to fund JV operations and owing oil companies arrears of cash calls, the National Public Relations Officer of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Comrade Emmanuel Ojugbana, noted that the Joint Venture between the NNPC and oil companies presently accounts for more than 60 per cent of Nigeria’s crude oil production.
Comrade Ojugbana said that contributions of the JV operations to the nation’s economy cannot be under emphasized despite increasing production from the Production Sharing Contracts (PSC) fields.
He explained, “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 activity 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 rationalize disengagement of staff and reduction in welfare packages as being due to lack of funds based on outstanding funding arrears.”
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