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Nigeria: JV Funding - NNPC Gets FG's Approval to Raise Funds From Capital
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Leadership (Abuja)
15 May 2008
Posted to the web 15 May 2008
Ese Awhotu
Abuja
Nigeria National Petroleum Corporation (NNPC) has secured the approval of the Federal Government to raise funds from the capital market to finance the nation's Joint Venture (JV).
This approval is part of an alternative funding arrangement which the Federal Government has put in place following shortfalls in its joint venture with major oil companies opearting in the country which it admitted. Dr. Levi Ajunoma,the Group general manager public relations of the NNPC, disclosed this recently in a telephone interview with the LEADERSHIP.
"Government has approved for an alternative funding.It has approved that NNPC should go to the capital market to raise funds".
Reacting to Shell's recent outcry that the Fedral Government was not properly funding the JV, Ajunoma said government did not hide the fact that there are shortfalls in the Joint Venture, explaining that this is because of the conflicting demands for the country's oil money.
"There are conflicting demands, roads, education, health and others, all of these depend on oil money.What Shell said is true but government will not be able to provide everything the partners require".
"The whole idea of going to the capital market is to meet the short falls in funding. Government is aware and we are working hard to raise money in the capital market, it is regretable but will not linger on for long".
Chief financial officer of Royal Dutch Shell, Peter Voser, agreed that discussions are on with the Nigerian government, aimed at resolving the funding problems of its Joint Venture Shell petroleum develoment company.
He said, "we are working out a detailed agreement to solve the funding issue that will allow us to continue investing in Nigeria".
Though he declined to say precisely when an agreement could be reached,Voser expressed optimism that progress is being made on the funding issue.
Shell owns 30 per cent of SPDC, which operates it's offshore businesses in Nigeria.The other 55 per cent is owned by the Nigerian government".
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On the issue of gas flaring, the NNPC demanded detailed expalnation from Shell as to why the company said it can no longer meet the 2008 deadline agreed upon to stop gas flaring in the country." we need more explanation from Shell on the gas flaring issue before we can say anything" Ajunoma said.
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