Wednesday, June 16, 2021

Reps probe NNPC’s Joint Venture agreements


tiamin rice
House of Representatives nigeria

The House of Representatives on Tuesday resolved to investigate the operations of the Joint Venture agreements entered into with foreign oil multinationals by the Nigerian National Petroleum Corporation (NNPC) over allegations of massive leakages.

The House also summoned top officials of the Federal Ministry of Petroleum Resources to brief members on government’s initiative to end gas flaring by oil companies in the country.

The House therefore mandated its committees on Petroleum Upstream and Downstream when constituted to carry out a forensic assurance and review of the Joint Venture agreements to establish the amounts of income that accrued to the Joint Venture partners in the past seven years and the actual amount remitted to the Federation account and report back to the House within seven weeks.

This resolution was sequel to a motion entitled: “Recovery of revenues payable to the Federation Account from the Nigerian National Petroleum Corporation (NNPC) and its joint venture partners,” sponsored by Rep. Nicholas Ossai.

According to Ossai, under the joint venture agreements, the NNPC and oil companies are expected to fund the joint ventures and share the oil produced as well as other benefits with their interest holdings while all collectable revenues of the government of the federation are to be paid into the federation account.

He added that the sources of the joint venture income amount to billions of Naira, saying that besides the lifting of oil in the agreed sharing ratio, there are associated income or miscellaneous revenues accruable to the joint venture for which the Federal Government is entitled to a good share in accordance with the agreements.

“The operator companies net off these income against expenses (already settled) allegedly in collusion with officials of the NNPC to avoid the remittance of the income to the federation account.

“The Joint Operation agreement largely favour the operator companies to the detriment of the non-operator, the NNPC, which is the agent of the Federal Government”, he said.

Meanwhile, the summons extended to officials of the Petroleum Resources ministry follows the unanimous adoption of the motion sponsored by Rep. Uchechukwu Nnam-Obi over the failure of the Federal Government to attend the Zero Routine Gas Flaring Initiative which held on April 17, 2015 in Washington DC, USA.

Thereafter, the House mandated its committees on Gas Resources and Petroleum Resources (Downstream) to conduct a comprehensive review of all the relevant government policy initiatives aimed at curbing gas flaring in the country and assess the policies to determine if they conform to global best practices.

Rep. Nnam-Obi while moving his motion expressed displeasure at the failure of Nigeria to participate in what he called “a very important meeting that would have serious positive impact on the nation’s petroleum industry as well as the environment.”

He said that the Zero Routine Flaring by 2030 Initiative was launched by the United Nations Secretary General, Ban Ki-moon and the World Bank Group President, Jim Yong Kim, as part of the World Bank’s Spring meeting in Washington DC, USA.

“The initiative strives to get governments, Oil companies, and developmental institutions to see gas flaring as unsustainable as it constitutes waste of resources, poses grave environmental dangers to the people and also detrimental to the climate, and thus, agree to cooperate to eliminate routine flaring, not later than 2030.

“Nigeria’s absence at the meeting and its inability to sign the treaty, the cardinal objective of which is to end gas flaring by oil companies by 2030 is a major cause for concern”, the lawmaker added.

According to him, since Nigeria is faced with severe challenges arising from unbridled gas flaring at onshore/offshore production sites by international oil companies operating within its shores, the Federal Government had no excuse not to take advantage of such global initiative that would have helped in chatting a way out of the dangers of gas flaring.

He said further that “10 multinational Oil companies, six global development institutions and nine nations, such as Norway, Cameroun, Russia, Kazakhstan, Gabon, Congo, Angola and a host of other major industry players were all in attendance while Nigeria with serious gas flaring issues was not represented”.

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