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FG Signs JVC Deal to Grow Revenue by $2b

By Dipo Olowookere

Minister of State for Petroleum, Dr Ibe Kachikwu, has explained that the agreement signed by the Federal Government with joint venture partners on Thursday will increase the country’s revenue by $2 billion per annum.

”The immediate effect of the new cash call policy will increase net revenue per annum by about $2 billion.

”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 (mbpd)to 2.5mbpd by 2019.

”It will also see a reduction in Unit Technical Costs from $27.96/Barrel Oil Equivalent (boe) to $18/boe,” Mr Kachikwu explained.

He noted that the net payments to the Federation Account are expected to double from about $7 billion to over $14 billion by 2020.

The Minister added that the agreement signed with international oil companies will enable the nation exit from the joint Venture Cash Call (JVC) arrears accumulated over 14 years, totalling $6.8 billion.

He outlined other innovations and initiatives championed by the ministry over the past year as revamping the sector, restoring investors’ confidence and positioning Nigeria’s Oil and Gas value chain for profitability.

Mr Kachikwu described the deal as historic, pointing out that it would bring clarity and stability to the management of the country’s main revenue source.

“This new arrangement will guarantee payments of statutory Oil and Gas Royalties and taxes by NNPC and its JV partners as well as profit from its investments in the Joint Ventures,” the Minister submitted.

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Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

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