House of Representatives Moves to Probe NNPCL JV Deals of $60 Billion

The House of Representatives has announced that it would move to investigate the loss of over $60 billion in revenue due to the alleged inflated cash calls by the Nigerian National Petroleum Company Limited Joint Venture Agreements.

The House has mandated the relevant committees to closely investigate all the NNPCL Joint Venture operations to know the income and cash call costs due to each partner, especially the federation, and whether the proper process was followed.

This decision followed the motion sponsored by Chika Okafor on Wednesday's floor of the plenary.

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

As an FG representative, the lawmaker said that NNPCL has over 60% of the stake, while other partners account for the remaining 40%.

He said that joint ventures operate under a “Joint Operating Agreement” that spells out the responsibilities of each partner 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 negotiating costs (both Capex and Opex), has caused huge losses estimated at over $60 billion.

• NUIMS's activities have resulted in substantial revenue losses, fiscal deficits, and an alarming debt profile. Aware of the need to ensure integrity, transparency, and value for money in the NNPCL Joint Venture operations.

According to a report, the  House has called for the remittance of accrued 5% of users’ charges on petrol pump prices and diesel to the Federal Roads Maintenance Agency (FERMA) to enable it to discharge its functions.

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

Oseni led the debate, underscoring the importance of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Ministry of Finance, and Office of the Account General of the Federation to ensure that the user’s charges are immediately remitted to FERMA under Section 4(1) of the Agency’s (Amendment) Act, 2007.