Federal government to adopt new cash call policy, set to increase oil production

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Federal government to adopt new cash call policy, set to increase oil production

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The federal government is set to earn about $2 billion from a new cash policy effective from January 2017 while its oil production is to increase to 2.5 million barrels per day in 2019. This new cash call policy signals the end of the Joint Venture with International Oil Companies (IOCs).
Federal Government

Federal Government

Minister of State for Petroleum, Mr. Ibe Kachikwu explained that the agreement will bring sustainability and clarity to the country’s main source of revenue.”˜It is part of new measures and strategies aimed at eliminating the burden of Joint Venture Cash Call arrears and securing future funding for the Upstream Petroleum Sector. These strategies which are fully supported by the National Economic Council (NEC) will lead to an increase in national production from the current 2.2 million barrels per day to 2.5 million barrels per day.He also explained that based on history, the current cash call system has been structurally defective and has failed to address the perennial Joint Venture funding challenges being experienced in the industry. The new agreement, however will guarantee payments of statutory oil and gas royalties and taxes by NNPC and its JVC partners as well as profit from its investments in the Joint Ventures.

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