Baru: NNPC Owed No Cash Call Arrears in 2018

Maikanti Baru

Chineme Okafor in Abuja

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, yesterday stated that in 2018 fiscal year, the corporation fully paid its share of cash call obligations for oil and gas production to its joint venture (JV) partners.

Baru explained that such development also propelled Nigeria’s oil production to record an increase of about nine per cent, thus moving from 1.86 million barrels a day (mbpd) in 2017, to 2.019mbpd in 2018.

Speaking at the 12th edition of the annual conference of the Nigerian Association of Energy Economists (NAEE) in Abuja, Baru, said that the corporation’s upstream subsidiary, the Nigerian Petroleum Development Company (NPDC), equally recorded some capacity growth in its production which he noted rose from an average of 108,000 barrels a day (bpd) in 2017 to 165,000 bpd in 2018.

According to him, the percentage of NPDC’s production growth within the year under consideration was 52. Baru explained that the negotiation of JV cash call indebtedness to the international oil companies (IOCs) and NNPC’s commitment to meeting its obligations therein has helped restore investors’ confidence in the industry.

“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 NPDC in 2018 posted a production growth of 52 per cent compared to 2017 (that is, from an average of 108kbod in 2017 to 165kbod in 2018),” said Baru, who was represented by the Chief Operating Officer, Ventures of NNPC, Dr. Babatunde Adeniran.

“We 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 is for the second year in a row – we concluded the fiscal year without any cash call arrears.”

The December 2018 operations and financial report of the NNPC indicated that in 2018, the corporation transferred a total of $4.56 billion to its JV cash call account.

He 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 Services) 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.”

The NNPC Retail, he noted sold a total of 1.2 billion litres of petrol in 2018 as against 1.1 billion litres in 2017 representing a seven per cent increase in sales volume.

“This was achieved through addition of 40 new affiliate and leased stations bringing the network to 618 stations nationwide. NNPC Retail has also moved from loss making to profitability,” he added.