NNPC Saved N696m In Renegotiated 4 OMLs Asset Values – NEITI
The Nigeria Extractive Industries Transparency Initiative (NEITI) has informed that the value of the assets of four Oil Mining Leases [OML] earlier valued at $2.25 billion, were later renegotiated down to $1.554 billion with the defunct Department of Petroleum Resources [DPR] in 2017.
This was part of the revelations contained in the presentation made by NEITI delegation during the hearing held by the House of Representatives ad-hoc committee investigating the structure and accountability of Joint Venture (JV) businesses and Production Sharing Contracts (PSCs) of the NNPCL from 1990 to date.
NEITI’s director technical services, Dieter Bassi, spoke about the roles of agency in the joint venture agreements execution, which was signed by the Nigeria National Petroleum Corporation (NNPC) and other oil companies.
He presented JV agreements between the federal government represented by the NNPC-NAPIMS and participating oil and gas companies which have various levels of equity participation stating their stakes in the joint oil fields from 1999 to 2020.
Bassi noted that work is ongoing on the 2021 report, adding that the agreements were signed with Chevron, Elf Petroleum, Mobil producing Nigeria unlimited, Agip oil, Shell petroleum, Texaco oil and NNPC/NAOC/Phillips among others.
He informed further that the committee that, NNPC Joint Venture Cash Call was about $4,946,086,000 between 1999 and 2020.
According to him, assets were divested to NPDC from the NAOC JV in December 2012 when NNPC assigned 4 OMLs (60, 61, 62 & 63) to NPDC on the instruction of the minister of petroleum resources.
He informed that various cash calls were paid to NPDC by NNPC for divested assets. “The sum of $536.922 Million was paid as cash calls in 2013 (Naira and Dollar) by NAPIMS for OMLs in NAOC JV that had already been assigned to NPDC in December 2012 even though the crude oil lifted by NNPC from the OMLs concemed were paid into the account of NPDC.
“NAPIMS provided evidence of a refund of the sum of $389,057 million by NPDC in 2014 leaving an outstanding balance of $147.864 Million.
“There was however no evidence of any transfer of the refund to the Federation Account. NAPIMS also paid $35.541m and N2.5bn as cash calls to NPDC in respect of OMLs 26 and 42, which had been transferred to NPDC between September 2010 and April 2011.
“The sum of USD35, 127,000 was refunded by NPDC into JP Morgan Chase Cash Call Dollar Account in July 2013 for cash calls paid for the period April to November 2011 on OML 42.
“A review of NAPIMS documents indicated that there is an outstanding refund request by NAPIMS on OML 26 USD414, 000 and N249,272,000. The NEITI report also notes that NAPIMS did not provide details of basis for refund computation”, he said.
Chevron was queried by the Committee on the Escravos Gas-to-Liquids (EGTL) project being executed at about $10 billion, despite doing the same project in Qatar for $2 billion.
Responding, Chevron director corporation joint venture with NNPCL, Monday Ovuede, said increased costs led to the final cost of about $10 billion.