Senate investigates NNPC’s joint venture cash calls violation

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Senate
Senate

The Senate, on Wednesday, mandated its committees on Gas, Petroleum Upstream and Finance and Appropriation to investigate alleged joint venture cash calls obligations violations by Nigeria National Petroleum Corporation (NNPC).

This followed a motion by the Chairman, Committee on Gas, Sen. Bassey Akpan, over NNPC’s role in the joint venture cash calls obligation.

Joint Venture Cash Calls is the money paid by joint venture partners according to equity holdings of the partners for projects development usually determined and paid at the beginning of the year.

Akpan said that there were issues concerning outstanding joint venture cash calls by NNPC to the tune $6billion.

According to him, the inability of the NNPC to meet this obligation had largely affected crude oil production output and other activities in the oil and gas sector.

He said that there was an urgent need for the Senate to investigate the matter in view of its importance to the economy.

“Upon approval of the budget by the National Assembly, it has approved the implementation of joint venture cash call and it is treated as first line charge before remittance to the Federation Account.

“We have this issue of outstanding joint venture cash call to the tune of 6 billion dollars. We seek your support to enable us unravel the operation of the joint venture cash call.

“One thing is significant – a situation where NNPC spends sometimes close to 4 billion dollars a year on administrative expense.

“The corporation spends this amount of money without meeting the joint venture cash call obligation which is extremely very fundamental to the development of the country. It cannot be acceptable.

“This is as urgent as other matters of national importance. We should ensure that whatever is approved for going forward shall be adhered to strictly. The right thing should be done,” he said.

Supporting the motion, Chairman, Senate Committee on Information, Sen. Enyinannya Abaribe, said that the motion was timely in view of a need to point out anomalies in the oil sector.

He said, “I want to thank Sen. Akpan for pointing out the anomalies that go on in the oil sector. We need to look at how the NNPC carries out this part of its responsibility.

“Agencies of government have obligations to Nigeria to carry out what we have passed into law, and the relevant committees have the power to investigate, and if the committees are not satisfied, such matters will be brought before the senate.”

On his part, Sen. Yusuf Yusuf (APC-Taraba Central), called for a commission to manage investment in the oil sector to avoid any form of irregularity or violation of laid down rules.

According to him, “it is the right time for us to look at how to solve all these infractions. So many industries that are involved in oil are not doing joint venture cash calls.

“NNPC feels that they are a government unto themselves and they can decide to do whatever they want to.

“So, we should look into how these cash calls are managed because they are in lump sum. We have to look at the roles of other stakeholders as well.”

In his remark, President of the Senate, Dr Bukola Saraki, said that non-remittance of joint venture cash calls by agencies was a violation of the 1999 Constitution and should be taken seriously.

He vowed that the 8th National Assembly would not tolerate further flagrant violation of the law of the land.

“Going by previous experiences and the quantum of money involved, it affects the economy. There are also fundamental issues like disobeying the Constitution.

“This is a first line charge, specifically meant for the oil company joint venture cash call, and for it to be used for other things is a slight on this chamber and we take seriously.

“Even if this was done in the past, we must break from it now and ensure the right thing is done,” he said.

He urged the relevant committees to properly investigate the alleged violation to ensure that such obligations were carried out in a more transparent manner in future.

He urged the NNPC not to continue to use joint venture cash call for other things, adding, “If they need funding they can come with a budget.”

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