The NNPC and its Joint Venture Partners had in 2013 projected that there would be a one million barrel (Mboed ) increase in oil production by 2020 if all the business plans of 2013 were fully funded.
The Joint Venture funding challenge has constrained the growth of the upstream sector of oil and gas.
According to a document presented to President Muhammadu Buhari recently, the joint venture companies insisted that the Federal Government reduction in JV funding would exacerbate production decline, adding that funding and other challenges must be resolved in order to unlock Nigeria’s full production potential.
Lack of funding, arising from the consistent failure of the Federal Government to pay her cash calls which have run into over $13billion in arrears, among other things, has been cited as a major obstacle to the implementation to the business plan.
The one million barrels daily crude oil production increase plan by the Nigerian National Petroleum Corporation (NNPC) and its Joint Venture partners by year 2020 is being threatened by the inability of the partners to fully commence the implementation of the 2013 business plan for the upstream of the oil and gas industry.
The business plan makes provision for the reactivation of all the projects that have been put on hold, addressing the issues of oil theft, reducing the contract circle of projects and making available the necessary cash calls, so that those projects that have been suspended for lack of fund can be revisited.
Analysts say resolving problems associated with the Petroleum Industry Bill (PIB) is key to raising the volume of daily crude oil production because it has stalled investments in the sector.
