The Nigerian National Petroleum Corporation (NNPC) has disclosed that the four major investments it recently embarked upon with key upstream joint venture partners are capable of providing incremental revenue to the national treasury by over $30 billion within the next 10 years.
Maikanti Baru, group managing director of the state-owned oil company said in the country’s capital, Abuja, at the launch of an anti-corruption committee, said the investments which attracted a haul of close to $3.8 billion in foreign direct investments would serve as a vehicle to fast-track the prevailing post-Cash-Call exit era.
He listed the critical Joint Venture alternative financing upstream investments to include: The $1.2 billion multi-year drilling for 36 offshore/onshore oil wells under the NNPC/Chevron Nigeria Limited, codenamed project Cheetah and the NNPC/First E&P JV and Schlumberger tripartite $800 million alternative funding agreement for the development of the Anyalu and Madu fields in the Niger Delta.
Also listed are the agreements executed in London last week for the $1billon NNPC/SPDC JV Project Santolina and the NNPC/Chevron $780 million Project Falcon on Sonam, hitherto financed through JV Cash Call.
“These four projects alone are going to raise incremental revenues to Nigeria of over $30 billion over the life of the projects in less than 10 years. They will also serve as part of the vehicle for exiting JV Cash Calls. We have to pay our arrears of about $6billion that were incurred pre-2016 and we are also paying up a tranche of about $1billion 2016 arrears. We started in April 2017 with the payment of $400million and we will pay the balance before the anniversary of the first payment,’’ he said.
He explained that the arrangement would allow the NNPC to subsequently operate from the production revenue less the first line charge to the government which is the royalties and petroleum profit tax.
He said that whatever profit that accrues afterward would be remitted to the government after deduction of production cost.
Businessamlive recalls that the NNPC recently inked new investment deals with four oil companies including Chevron, Shell, Total, and Eni for the development of untapped fields both onshore and offshore. The deals are part of efforts on the part of the Nigerian government to boost crude oil production.