*Hopeful on early passage of PIB

By Hector Igbikiowubo &Yemie Adeoye

LAGOS—THE Nigerian National Petroleum Corporation, NNPC, expended N1.6 trillion (over $10.83 billion), about 57 per cent of its N2.8trn (over $19bn) to its cash call obligations last year.

Meantime, the corporation said it was banking on the timely passage of the Petroleum Industry Bill, PIB, having received the assurances of members of the National Assembly on it.

Its Group Managing Director, Dr. Mohammed Barkindo, said this at an interactive session with editors of the Vanguard in Lagos, weekend.

The NNPC helmsman, who was accompanied by some group executive directors and managing directors of some of the corporation’s business units, explained that payment of the cash call obligation for the 2009 fiscal year was made possible through application of alternative funding scheme.

JV cash calls not enough

“The joint venture cash calls in the past years have not been sufficient to meet this objective and the government in its own wisdom, Mr. President, in particular, on assumption of duties, directed NNPC to explore alternative sources of funding other than JV cash call and this we did through the carry arrangement and later on modified carry arrangement – of the $19 billion that the industry was budgeted to spend in 2009, the NNPC through the cash calls and through the modified carry arrangements have been able to provide 57 per cent which is a call-on obligation.”

He noted that it was important for the country to be able to continue to invest in the upstream oil sector for the purposes of sustaining not only the industry but the national economy.

Barkindo noted that despite the continued expansion of the non-oil and gas sectors evidenced by the dwindling contribution of the oil and gas to the national GDP which is now well below 30 per cent, Nigeria will continue to rely on oil and gas for the foreseeable future, especially foreign exchange earnings.

On the budget for 2010 joint venture operations, the corporation’s helmsman said NNPC was working with the National Assembly, adding that the government will continue to meet its level of production and will continue to explore alternative funding to meet its obligations.

Hope rises on PIB

On perceived delay of passage of the PIB, he said the corporation had productive interactions with the respective committees of the National Assembly on it.

“I don’t know of any other bill since the inception of civil rule that has generated this much interest with the corporation engaging several groups from across the country.