We will ensure JVs, PSC partners don’t run excessive bills – NNPC
The Nigerian National Petroleum Corporation (NNPC) has said it is making efforts to ensure that Joint Venture (JV) and Production Sharing Contract (PSC) partners do not run excessive bills at the expense of the nation.
Maikanti Baru group managing director of the corporation explained that apart from the establishment of an efficiency unit in the corporation to ensure value for money across all operations, NNPC had also done a lot in renegotiating contracts as well as benchmarking costs in keeping with international best practices, adding that the effort had yielded significant results in terms of reduction in the cost of crude oil production per barrel in the Industry.
Also responding to a question on why the Production Sharing Contract (PSC) agreements had not been reviewed for a long time despite clauses in the agreements that stipulate periodic review, Baru disclosed that a Presidential approval had been secured and that a committee would be set up soon to carry out the review.
He, however, disclosed that in the absence of a comprehensive review, NNPC had looked at projects on a project-by-project basis and raised observations which some of the partners had taken permission to present before their managements.
Maikanti Baru, gave the clarification to members of the Senate Committee on Petroleum (Upstream) who were at the corporate Headquarters of the corporation in Abuja on an oversight visit.
He also told them that NNPC has been faithfully remitting all revenues accruing to it to the Federation Account.
A release by Ndu Ughamadu the group general manager, group Public affairs dvision of NNPC, stated that Maikanti Baru, said allegations of non-remittance of funds had become a recurrent decimal over the years, occasioned in part, to the nature of the corporation’s operations which involved credit lines requiring constant audit and reconciliation.
“While the process of audit and reconciliation of accounts is on, a lot of accusations of short payments and non-remittances are usually traded, we endeavour to keep our cool on these allegations because we know that we remit whatever is due to the Federation Account”, he explained.
Further putting the issue in perspective, Baru stated that such allegations usually arose from disagreements over expenses borne by the corporation on behalf of the Federal Government.
Speaking earlier, Senator Omotayo Alasoadura, Chairman of the Senate Committee on Petroleum (Upstream), who led members of the committee on the oversight visit, said the committee would like to have a month-by-month crude oil production figures for the past two years and crude prices for the period.
He called on NNPC to fully cooperate with the Senate in providing input on the fiscal component of the Petroleum Industry Reform Bill and the other segments of the Bill coming up for public hearing next week at the National Assembly.
“We have just come to fulfil another part of our mandate, which is to oversee what NNPC is doing. It’s not a mission to harass anybody, it’s for us to understand each other, give advice, as nobody is a sole repository of knowledge. Everybody knows that Baru is very knowledgeable in the Industry, but he can’t know everything, even people who don’t know anything about the Industry may have useful ideas that can be of help”, the committee chairman said.
OLUSOLA BELLO