The Federal Government on Wednesday formally ended the era of cash call payments to the joint venture operators in the oil and gas industry, Premium Times reports.
President Muhammadu Buhari said while presenting the 2017 Budget to the joint session of the National Assembly that effective January 1, 2017, the government would no longer provide money for joint venture cash calls in the national budget for oil and gas operations.
Buhari said; “Going forward, all Joint Venture operations shall be subjected to a new funding mechanism, which will allow for cost recovery.” “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 added.
The Executive Council of the Federation and the National Economic Council recently approved a new funding regime for joint venture oil and gas operations in the country. The Minister of State for Petroleum Resources, Emmanuel Ibe Kachikwu, described the new upstream JV arrangement as an incorporated Joint Venture.