Reps Probe NNPCL JV Deals, $60bn Revenue Loss

Reps Probe NNPCL JV Deals, $60bn Revenue Loss

The House of Representatives has expressed readiness to investigate the loss of over $60bn revenue due to alleged inflated cash calls by the Nigerian National Petroleum Company Limited Joint Venture Agreements.

As a result,  the House mandated the relevant committees to conduct a thorough probe of all the NNPCL Joint Venture operations to determine income and cash call costs due to each partner, especially the federation and also whether due process and diligence were followed.

This decision was a sequel to the adoption of a motion sponsored by Chika Okafor on the floor of the plenary on Wednesday.

Moving the motion, Okafor said NNPCL on behalf of the Federal Government operates JVs and related agreements with private oil companies in both oil and gas sectors, with the aim of sustainable revenue generation, thus enhancing the economic development of the nation.

The lawmaker noted that that the NNPCL, as representative of the Federal government and Federation has about 60 per cent stake while other partners account for the remaining 40 per cent.

He said the joint ventures operate under a “Joint Operating Agreement” that spells out the responsibilities of each of the partners in the ventures.

The lawmaker noted that “due to bloated cash call costs, the NNPCL Upstream Investment Management Services, a unit under the NNPCL in charge of negotiation of costs (both Capex and Opex), has caused huge losses estimated at over $60bn over the years.

“The activities of NUIMS have resulted in huge revenue losses, fiscal deficits and an alarming debt profile, aware of the need to ensure probity, transparency and value for money in the NNPCL Joint Venture operations.”

Meanwhile, the House has called for the remittance of accrued five per cent users’ charge on petrol pump price and diesel to Federal Roads Maintenance Agency FERMA to enable it discharge its functions.

This followed the adoption of a motion by  Aderemi Oseni, urging Ministry of Petroleum Resources, NNPCL, Nigerian Midstream and Downstream Petroleum Regulatory Authority and Ministry of Finance, and Office of the Account General of  the Federation to ensure that the user’s charge are immediately remitted to FERMA under Section 4(1) of the Agency’s (Amendment) Act, 2007.

Leading debate on the motion, Oseni said to underscore the importance of funding to road management and maintenance, Section 4(1) of the Federal Roads Maintenance Agency (Amendment) Act, 2007  provides that  “The fund of the agency shall consist of 5 per cent users’ charge on pump price of petrol, diesel and of which 40 per cent will accrue to FERMA.”

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