In order to deepen the activities of the Nigerian Stock Exchange (NSE), many capital market operators have called on the Federal Government to grow its equity holdings in the Joint Venture (JV) oil and gas operations in Nigeria and list some percentage of its shares on the Nigerian Stock Exchange (NSE), which lists companies’ equities for daily trading.
In their views, the deal will among other things relieve government of the burden of JV cash calls, estimated at $6-9billion annually, in addition to about $6.8billion in arrears for five years, which it is struggling to exit through a new funding arrangement.
Industry players refer to cash calls as the counterpart funding which the Federal Government, represented by the Nigerian National Petroleum Corporation, (NNPC), pays yearly as its 60 percent equity shareholding in various oil and gas fields operated by international oil companies (IOCs) and indigenous oil firms.
It would be recalled that by mid-November last year, the Minister of Petroleum Resources, Dr. Ibe Kachikwu, announced the cancellation of the JV cash calls, following approval from the Federal Executive Council (FEC).
However, prior to the announcement, the NNPC Group Managing Director, Maikanti Baru, had claimed the JV cash call debt burden had been reduced to $2.5billion in 2016, and also disclosed that the exit model government is pursuing becomes effective from January 1st.
he said “guarantees government most of the revenue that normally accrues to it from the joint venture operations by lifting the royalty and tax oil upfront.”
NNPC spokesman, Ndu Ughamadu, could not confirm the development when contacted by The Guardian to find out if the exit model had taken off as envisaged.
