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JV oil assets, projects gulped N219.4bn in two months – NNPC

The Nigerian National Petroleum Corporation spent a total of N219.4bn on oil and gas assets being developed through joint ventures with private firms as well as government priority projects in the first two months of this year.

The NNPC spent N108.93bn on the JV assets and the priority projects in January while N110.47bn was expended in February.

The NNPC transferred $80.32m (N30.44bn) and $84.36m (N31.98bn) to the JV cash call account as first line charge in January and February respectively.

According to data obtained from the corporation, a total of N176.7bn (N78.49bn each) went to JV cost recovery and government priority projects in January and February.

The NNPC, which represents the Federal Government in the JVs, has an obligation to make cash call payment for the development of the assets.

The nation’s oil and gas production structure is majorly split between the JV (onshore and in shallow waters) and the Production Sharing Contracts in deepwater offshore.

Under the JV arrangement, both the NNPC and the private firms contribute to the funding of operations in the proportion of their equity holdings and generally receive the produced crude oil in the same ratio.

The money expended on the JV assets and the priority projects were taken from the proceeds from oil and gas exports and sale of domestic oil and gas.

Total revenue from oil and gas exports rose to $115.34m in February from $108.75m in January, while domestic sales proceed receipts fell to N159.24bn in February from N163.64bn in January, the NNPC data showed.

The corporation, in its latest monthly report, said, “Total export receipt of $115.34m was recorded in February 2021 as against $108.75m in January 2021. Proceeds from crude oil amounted to $30.99m while gas and miscellaneous receipts stood at $81.18m and $3.17m respectively.

“Of the export receipts, $30.99m was remitted to the Federation Account while $84.35m was remitted to fund the JV cost recovery for the month of February 2021 to guarantee current and future production.

“Total export crude oil and gas receipt for the period February 2020 to February 2021 stood at $2.22bn; out of which the sum of $1.28bn was transferred to JV Cash Call as first line charge and the balance of $0.94bn was paid into Federation Account.”

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