President Buhari presents 2017 national Budget to a joint session of the National Assembly at the National Assembly Complex Abuja on 14th December, 2016.By Simon Ateba/Lagos
President Muhammadu Buhari vowed on Wednesday to bring back oil production to at least 2.2 million barrels per day in 2017 and announced that the Federal Government would no longer make provision for Joint Venture cash-call from January 2017.
“Going forward, all Joint Venture operations shall be subjected to a new funding mechanism, which will allow for Cost Recovery,” Buhari said without giving details.
A cash call in the oil and gas industry is money Nigeria agrees to pay when it goes into joint venture operations with international oil companies. But for many years, the Federal Government of Nigeria through its regulatory agency, the Nigerian National Petroleum Corporation, NNPC, has been notorious in failing to meet its cash call obligations.
That chronic failure has often delayed many projects, led to arbitral disputes and cancellation of some projects.
Mr. Buhari promised a funding arrangement without giving details.
“This new funding arrangement is expected to boost exploration and production activities, with resultant net positive impact on government revenues which can be allocated to infrastructure, agriculture, solid minerals and manufacturing sectors,” he said.
To get oil production back to at least 2.2 million barrels per day, Mr. Buhari said his administration will continue “our engagement with the communities in the Niger Delta to ensure that there is minimum disruption to oil production”.
“The National Assembly, State and Local Governments, Traditional Rulers, Civil Society Organisations and Oil Companies must also do their part in this engagement. We must all come together to ensure peace reigns in the Niger Delta,” he added.