The Federal Government has reduced its capital budget for the 2015 joint venture oil operations by 40 per cent to $8.1 billion from the initial budget of $13.5 billion due to the slump in crude oil prices, sources at the Nigerian National Petroleum Corporation (NNPC) said.
The Federal Government through the NNPC operates joint ventures with multinational companies, including Shell, ExxonMobil, Chevron, Total and Eni in the production of the nation’s oil and gas.
“The NNPC has informed the joint venture partners that this year’s capital expenditures will be cut down by 40 per cent from the initial proposed budget of $13.5 billion.
“The $13.5 billion has been the level that has been maintained in the past three years, but because of the drastic decline in oil prices that level cannot be sustained this year,” it added
According to Platts, NNPC did not comment officially, but under Nigeria’s joint venture arrangements, NNPC contributes about 60 per cent of the funding requirement, while the foreign firms provide the 40 per cent.
Initially, the government had proposed N1.22 trillion ($7.5 billion) to fund its share of the oil joint venture operations this year, with the foreign oil firms providing the balance of $6 billion.
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