Following a motion brought before the Senate Chamber on Wednesday by the Senator representing Akwa Ibom North East, Senator Bassey Albert Akpan (OBA), the Senate has asked its Joint Senate Committee on Petroleum (Upstream and Downstream), Finance and Appropriation to immediately commence the investigation of joint venture cash calls by the Nigeria National Petroleum Corporation (NNPC).
The Senate gave the directive after expressing concern over an allegation that the NNPC had been violating rules governing its joint venture cash call responsibility.
It simultaneously asked the committee to come up with sanctions for any known violation of appropriation acts in the oil and gas sector.
Senator Albert in the motion alleged persistent constraints by NNPC to meet its cash call obligations, a situation he said had worsened the country’s crude oil production output and other activities in the oil and gas sector.
Putting the current outstanding cash call obligations in the oil and gas sector at $6bn, Akpan argued that cash calls ought to be treated as first line items by NNPC before remittance of available balance on its collectible revenues from crude sales to the federation account.
He said such revenues ought to be handled as approved by the National Assembly.
He also said it was worrisome that crude oil production from the joint venture between the NNPC and IOCs had declined by 47 per cent as at the last quarter of 2015 as a result of federal government’s inability to meet its cash call obligation.
According to Akpan, it is illegal and unconstitutional for NNPC to spend billions of dollars which he said ought to be used to settle joint venture cash calls on “inconsequential administrative expenses.”
He recalled that the National Assembly had approved over N1tn as joint venture cash calls for 2016 fiscal year, saying the legislative institution must ensure strict adherence to the approval as contained in 2016 Appropriation Act and Medium Term and Expenditure Framework .