By Obas Esiedesa
The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru has noted that meeting up with cash call obligations to its Joint Venture partners has restored investors’ confidence to Nigeria’s oil and gas sector.
Baru who spoke on Monday at the opening of the 12th annual conference of the Nigerian Association for Energy Economists (NAEE) in Abuja said last year the corporation with its cash call obligation to the international oil companies (IOCs).
He explained the fallout of this was the nine percent increase in volume of crude oil produced in the country.
According to him, “Last year, Nigeria’s national average daily crude oil production stood at about 2.019 million barrels. This volume translates to an increase of nine per cent above the 2017 average of 1.86 million barrels and comes as a significant improvement from the unimpressive production levels recorded on my assumption of office in July, 2016. To underline this, the Nigerian Petroleum Development Company (NPDC) in 2018 posted a production growth of 52 per cent compared to 2017 (i.e. from an average of 108kbod in 2017 to 165kbod in 2018)”.
Baru who was represented by the Chief Operating Officer, Ventures of NNPC, Dr. Babatunde Adeniran explained that NNPC “negotiated settlement of the pre-2016 JV cash call arrears and also championed indigenous cash exit/JV self-funding mechanism. So far, we have repaid over $1.5 billion out of the $5.1 billion cash call arrears to date, a development that has not only restored the confidence of IOC JV partners, but has also led to improved reserves growth and crude oil production.
“It was quite fulfilling that in 2018 – that’s for the second year in a row – we concluded the fiscal year without any cash call arrears”, he added.
The December 2018 operations and financial report of the NNPC indicated that in 2018, the corporation transferred a total of $4.56billion to its JV cash call account.
Baru stated that the corporation has also made some gains in ensuring that supply of petrol to Nigerians was stable, adding that a special security taskforce had been set up to tackle instances of products’ hoarding and smuggling.
“To entrench our gains and achievements in the steady supply and distribution of petroleum products nationwide, a petroleum product monitoring taskforce comprising of NNPC and DSS (Department of State Security) personnel was set up.
“The team has its presence in all the critical and active depots particularly in the coastal areas of the country and their impact is being felt especially in the area of preventing round tripping and, or back-loading from the coastal depots and other forms of sharp practices as noticed during the last fuel crisis.”