NNPC: Repayment of $5.1bn Cash Call Arrears to IOCs Progressing

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* Boosts gas supply to power generation companies by 88.89% in one year

Chineme Okafor in Abuja

The Nigerian National Petroleum Corporation (NNPC) Sunday disclosed that it is making good progress with its repayment of the $5.1 billion negotiated cash call debts to International Oil Companies (IOCs) in Nigeria, stating that both the National Economic Council (NEC) and Federal Executive Council (FEC) are aware of the progress it has made so far.

The NNPC however did not disclose how much it has paid so far to the IOCs, it told THISDAY that it has kept to the terms of the repayment agreement, adding that the Federation Account Allocation Committee (FAAC) was briefed regularly on the payment details.

“The administration of President Muhammadu Buhari inherited a cash call arrears of $6.8 billion unpaid by previous administrations. President Buhari subsequently directed NNPC to resolve this challenge which had led the IOC JV partners to drastically reduce investment in the Nigerian oil sector.

“Based on Mr President’s directive, NNPC engaged the IOCs and negotiated the cash call arrears down from $6.8 billion to $5.1 billion, saving the country $1.7 billion. NNPC then set a repayment plan in place,” said NNPC’s Group General Manager, Public Affairs, Mr. Ndu Ughamadu, to THISDAY over the phone.

Ughamadu further stated: “The key point with the repayment plan was that the arrears would be repaid from incremental production over a five-year period so that base production would be preserved. This arrangement was translated into a repayment agreement which was further endorsed by the governors at National Economic Council and approved by Federal Executive Council.

“To date, NNPC has kept to the terms of the repayment agreement. The FAAC meeting is regularly briefed on the repayment status and will receive a briefing update at the next scheduled FAAC engagement.”
Meanwhile, the corporation stated that it has increased the supply of gas to the country’s power sector between January 2017 to January 2018 by 88.89 per cent.

Ughamadu, in a different statement he sent to THISDAY, said the information was contained in the corporation’s monthly Financial and Operations report for January 2018.

According to him, gas-to-power supply as at January 2018, was 731 million metric standard cubic feet (mmscf) per day as against 387mmscf/d in January 2017, representing 88.89 per cent increase.

“An average of 731mmscf/d of gas was sent to over 20 domestic thermal power plants in the month of January 2018, generating a thermal power output of 3,076 megawatts (MW) to the national grid, representing 76.7 per cent of the total national power generation,” Ughamadu quoted the report to have stated.

The report, he said, indicated that an additional 365mmscf/d of gas was supplied to the industrial sector to power over 50 companies in the period under review to boost the nation’s economy.

He noted that the total gas production for the month was put at 8,169mmscf/d out of which 14 per cent was supplied to the domestic market, 43 per cent for export, 31 per cent re-injected and the balance flared.

Ughamadu equally disclosed that the total crude processed by the corporation’s two refineries in Kaduna and Port Harcourt for January 2018 was 204,877 metric tonnes.

He stated that production by the two refineries during the period translated into a combined yield efficiency of 89.97 per cent as against the 88.99 per cent in December 2017.

The report said in the month under review, 1,463.66 million litres of petrol and 33.79 million litres of kerosene were supplied into the country through the Direct Supply Direct Purchase (DSDP) arrangements, adding that the corporation’s supply of petrol into the country during the period was far above the normal daily supply of 35 million litres per day to ensure products availability nationwide.

By the disclosure, NNPC implied that it supplied an average of 47.2 million litres of petrol daily in the country in January 2018.

The report further reiterated that NNPC was inching closer to choosing financiers for its refineries with a view to achieving a 90 per cent capacity utilisation per stream/day before the end of 2019.

It however said that vandalism of its crude oil pipeline was among its biggest challenges in January 2018, adding that the malaise was putting it in a disadvantaged position.

One hundred and ninety four pipeline points, it stated were vandalised in January, with the Port Harcourt to Aba, Aba to Enugu pipeline segment accounting for 187 points or 86.57 per cent of the affected pipeline.