The Nigerian National Petroleum Corporation spent a total of N173.38bn on oil and gas assets being developed through joint ventures with private firms in October and November 2020, its latest monthly report showed.
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 NNPC’s cash call payment rose to $271.88m (N103.04bn) in November from $185.58m (N70.34bn) in October, according to the report.
In October, the dollar allocation to the JV cash call account was $21.89m while the naira portion was N62.04bn ($163.69m).
The dollar allocation to the JV cash call account rose to $73.27m in November while the naira portion increased to N75.27bn ($198.61m).
The corporation said the total export receipt of $125.71m was recorded in November as against $54.09m in October.
It added that the proceeds from crude oil amounted to $73.27m while gas and miscellaneous receipts stood at $29.66m and $22.78m respectively.
The NNPC said, “Of the export receipts, $52.43m was remitted to the Federation Account while $73.27m was remitted to fund the JV cost recovery for the month of November 2020 to guarantee current and future production.
“Total export crude oil and gas receipt for the period November 2019 to November 2020 stood at $3.28bn. The sum of $1.89bn was transferred to JV Cash Call as first-line charge and the balance of $1.39bn was paid into Federation Account.”
According to the report, in November, the NNPC remitted the sum of N169.74bn to the Federation Account Allocation Committee.
“From November 2019 to November 2020, total NNPC remittances to FAAC is N1.77tn; out of which Federation and JV with government priority projects received the sum of N788.45bn and N983.36bn respectively,” it said.
The federation crude oil and gas lifting is classified into equity export and domestic, both of which are lifted and marketed by the NNPC and the proceeds remitted into the Federation Account.
The equity export receipts, after adjusting for the JV cash calls, are paid directly into the Federation Account domiciled in the Central Bank of Nigeria.
Domestic crude oil of 445,000 barrels per day is allocated for refining to meet domestic product supply.
Payments are effected to the Federation Account by the NNPC after removing crude and product losses, pipeline repairs and management costs incurred.
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