Nigeria’s current investment in Joint Venture stands at $7bn- NNPC

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Nigeria current joint venture ,JV investment in the Oil and Gas is currently put $7bn annually , the Nigerian National Petroleum Corporation,NNPChas said.

Nigeria’s Minister of State for Petroleum Emmanuel Ibeh Kachikwu in the NNPC has maintained that the corporation needs to attract to the tune of $100bn worth of investments to enable the it create the needed impact into the Nigerian economy.
But a report presented by the corporation at the recent stakeholders’ workshop organised by the Nigeria Extractive Industries Transparency Initiative on oil sector validation, the NNPC stated that it manages 14 JVs for the country.
It stated that 12 of the partnerships were actively producing, while two were greenfield investments that will mature next year.
The Group General Manager, Crude Oil Marketing Division, NNPC, Mele Kyari, explained in the report, that it was the duty of the corporation to manage the country’s interests in the oil and gas industry.
On Nigeria’s investment profile, he said the NNPC manages all upstream investments on behalf of the state, adding that this include 14 JVs, nine Production Sharing Contracts and one Service Contract.
For the JVs, Kyari said, “Out of the 14 JV partnership, 12 (five international oil companies and seven indigenous companies) are actively producing, while two are greenfield investment to be matured by 2019. The quantum of government investment in JV is about $7bn per annum.”
In JVs, the Joint Operating Agreements is the basic, standard agreement between the NNPC and the operators.
The JOA sets the guidelines/modalities for running the operations and is different from the memorandum of understanding.
While it contains the basic understanding on the joint venture, the MOU is a response to the specifics of fiscal incentives.
In JVs, one of the partners is designated the operator. The NNPC said it reserves the right to become an operator, as all parties are to share in the cost of operations.
Each partner can lift and separately dispose its interest share of production subject to the payment of Petroleum Profit Tax and Royalty. The operator is the one to prepare proposals for programme of work and budget of expenditure joint on an annual basis, which shall be shared on share holding basis.
Each party can opt for and carry on sole risk operations. Technical matters are discussed and policy decisions are taken at operating committees where partners are represented on the basis of equity holding.
Some of the national oil firm’s JVs involving foreign owned companies are operated by Shell Petroleum Development Company of Nigeria Limited, a JV which accounts for more than 40 per cent of Nigeria’s total oil production (899,000 barrels per day in 1997) from more than 80 oil fields; Chevron Nigeria Limited, which is a JV that has in the past been the second largest crude producer (approximately 400,000 bpd).
The NNPC also has JVs with Mobil Producing Nigeria Unlimited, Nigerian Agip Oil Company Limited, Elf Petroleum Nigeria Limited, and Texaco Overseas Petroleum Company of Nigeria Unlimited.
On Production Sharing Contracts, Kyari stated that 68 PSC blocks had been awarded and noted that, “however, there are only nine currently operating, as average PSC daily production is 850,000bpd.”
He told his listeners that NNPC was into one service contract, producing about 6,000bpd.
The oil firm’s group general manager also stated that NNPC manages interface with operating companies on behalf of Nigeria.
According to him, the goal of the oil firm was to ensure the efficient management of Nigeria’s upstream oil and gas businesses to sustain industry growth and deliver maximum value for the benefits of Nigerians and other stakeholders.