NNPC Reduces Cash-call Debts to IOCs by $3.11bn

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•FG, labour to meet mid-April on petrol pricing
•Tanker drivers threaten strike

Onyebuchi Ezigbo, Emmanuel Addeh in Abuja and Peter Uzoho in Lagos

The Nigerian National Petroleum Corporation (NNPC) has so far paid a total of $3.118 billion cash-call debts owed the five major international oil companies (IOCs), leaving an outstanding debt of $1.570, according to statistics released by the corporation.

The statistics showed that NNPC funded its Joint Venture (JV) oil and gas assets as well as its priority projects to the tune of N112.14 billion in February.

This is coming as the federal government and the organised labour will reconvene by the middle of April for their negotiations to finalise decision on the adjustment of petrol price and electricity tariff.

However, tanker drivers, under the aegis of Petroleum Tanker Drivers (PTD), have threatened to withdraw services of their members if the Nigerian Association of Road Transport Owners (NARTO) fails to negotiate the renewal of the Collective Bargaining Agreement (CBA) for new working conditions for them.

NNPC stated that while the servicing of its JV assets for the month under review cost the corporation about N95.85 billion, financing of selected projects, including its search for oil in the frontier basins, gulped N16.28 billion.

In its March presentation to the Federation Account Allocation Committee (FAAC), the corporation stated that it had reduced its pre-2016 cash call arrears repayments to the International Oil companies (IOCs) to $1.57 billion as of January 31, 2021.

While the negotiated JV debt owed the major five oil multinationals stood at $4.68 billion before now, the documents indicated that about $3.118 billion had been offset by the national oil company, with $1.570 still outstanding.

In December 2016, the Ministry of Petroleum Resources had negotiated a discount with the IOCs, comprising Shell Petroleum Development Company (SPDC), Total Exploration and Production Nigeria (TEPNG), Mobil Producing Nigeria (MPN), Chevron Nigeria Limited (CNL) and Nigeria Agip Oil Company (NAOC) from about $5.1 billion down to $4.6 billion and had since then continued to reduce the debt payments.

Fresh information from the corporation revealed that SPDC, which was owed a negotiated debt of about $1.37 billion, had been paid $455.3 million as at the end of January, while TEPNG, which was owed $610.972 million, had got $364.6 million. NAOC to which the NNPC owed $774.66 million received $422.66 million and CNL got $1.042 billion out of its outstanding negotiated debt of $1.097 billion.

It added that MPN had been fully paid its outstanding $833 million and has henceforth “reverted to base” at the time of releasing the information.

As of January 31, 2021, the NNPC stated that its debt obligations to SPDC, CNL, TEPNG and NAOC respectively stood at $917.2 million, $55.4 million, $246.3 million and $351.9 million.
On its JV obligations to its partners, the figures released by the NNPC showed that it recorded a deficit or variance of N107.3 billion, falling below its actual budget of N203.1 billion for the purpose in February.

The NNPC also noted that through its subsidiary, the National Petroleum Investment Management Services (NAPIMS), it spent about N16.2 billion to rehabilitate refineries, pay its monthly obligation on the Nigeria-Morocco gas pipeline and ramp up oil search in the frontier basins.

It listed other projects funded with the N16.2 billion to include national domestic gas development, gas infrastructure development, renewable energy development, crude oil pre-export inspection agency expenses and pre-export financing.

A breakdown of the expenses showed that the refineries gulped N8.33 billion of the amount, crude oil pre-export financing received zero allocation, although N5 billion was budgeted for it, national domestic gas development was funded with N3.098 billion while gas infrastructure development took a share of N2.39 billion as against the N5 billion budgeted for it.

In addition, the corporation stated that its frontier exploration services got N1.919 billion while crude oil pre-export inspection agency expenses and pre-export financing got N393 million.

The NNPC, in the document, said it was ramping up its focus on renewable energy development financing, which gulped N117.1 million for the month, while N83.33 million financing was provided for the Nigeria-Morocco pipeline.

The pipeline, estimated to cost $25 billion, is expected to serve as an extension of the existing West African Gas Pipeline currently serving Benin, Togo and Ghana, as well as connect with Spain through Cádiz.

NNPC’s total spending on selected infrastructure, including on gas development, renewables, refineries, however, fell short by N14.2 billion when compared with the actual budget of N30 billion for February. The Brass LNG gas supply, however, did not get any funding for the month under review.

FG, Labour to Meet Mid-April on Petrol Price Adjustment

The federal government and the organised labour will reconvene their negotiations to finalise decision on appropriate pricing of petrol and electricity tariff by middle of April.
THISDAY gathered that the meeting will hold before the commencement of the Ramadan.
A source privy to the negotiations told THISDAY at the weekend that as part of moves to resolve the contentious issue of the appropriate pricing for petrol, the federal government side has been consulting others with a view to building a consensus on the matter.

He said the federal government had been considering the report of the joint committee of representatives of the federal government and organised labour on measures to apply to moderate the fuel price template.
Last week, NNPC had lamented what it described as the heavy financial burden it was being made to bear in bearing the extra cost of petrol due to the differential in the landing cost and pump price of the commodity owing to the rising cost of crude oil in the international market.

It said that the current N165 pump price was no longer feasible, adding that the actual price should be N212 or above.
But the source told THISDAY that the new thinking of the government was that the appropriate pricing of petrol would now be decided by the various tiers of government as represented at the National Economic Council (NEC).

The source said: “The federal government has decided that the issue of subsidy should be discussed at the appropriate forum along with other tiers of government. As you know, NNPC has declared underrecovery of funds used in importation of petrol and the money used by the corporation to source petroleum products is from the Federation Account operated by the three tiers of government. So, we intend to discuss and arrive at a consensus on the modules to be adopted before meeting with labour.”

While speaking on the outcome of a bipartite meeting of the federal government and the organised labour in Abuja, Minister of Labour and Employment, Senator Chris Ngige, had said that the labour had investigated the report of the Technical Committee on Petrol Pricing Framework as agreed at the last meeting and made its submissions. The NNPC also presented a report.
He said: “The labour side saw that they (NNPC) were making some points and like I said, it is work in progress.”

Tanker Drivers Threaten Strike

Meanwhile, tanker drivers have threatened to withdraw their services if vehicle owners under the auspices of NARTO fails to negotiate the renewal of the Collective Bargaining Agreement (CBA) for new working conditions for petroleum tanker drivers.

In a communiqué issued at the weekend after its executive council’s meeting, the fuel tanker drivers threatened to disrupt fuel supply by going on a strike if the government fails to enforce the compulsory installation of safety valves in all petroleum trucks to protect the inflammable contents of the trucks from spilling over in a situation of road mishaps.

PTD, in the communiqué signed by its National Chairman, Mr. Salmon Akanni Oladiti, however, issued a 14-day ultimatum to NARTO to initiate new conditions of service for petroleum tanker drivers with effect from March 27.
The drivers also urged the federal government to ensure that the installation of safety valve is made mandatory in all petroleum trucks with effect from May 1, 2021.