FG Directs JVCs To Cut 2015 Budget

As a precautionary mea
sure to the fall in crude oil prices in the global market, which has affected many projections in the nation’s oil and gas industry, the Federal Government has directed the Joint Venture Companies (JVCs) to cut their 2015 budget by 40 per cent.
The directive is based on the realisation that at the present price of crude oil in the global market, it would be impossible for the joint ventures to execute all their projects earlier drawn up in 2014.
The National Petroleum Investment Management Services, NAPIMS which overseas activities of the JVCs, Production sharing companies (PSCs) as well as Services Contract Companies (SCCs) issued the directive on behalf of the government.
NAPIMS reminded the JVCs, PSCs, and SCC that their budgets were drawn early in 2014 when crude oil prices were above $100 per barrel, insisting it must be slashed in line with funding constraints as at present.
The Tide gathered that consequent upon the directive most International Oil Companies operating the joint ventures with the Nigerian National Petroleum Corporation (NNPC) have started cutting down their budgets.
Top on the list are Nigerian Agip Oil Company (NAOC), Shell Petroleum Development Company (SPDC), Chevron Nigeria Limited, (CNL), Mobil Producing Nigeria Unlimited (MPNU), and Total Exploration and Production Nigeria Limited (TEPNG).
South Africa’s oil and gas explorer (SacOil) said it may cancel an agreement to complete an appraisal on a prospective oil asset in Nigeria as a result of the effect of the oil slump.
Spokesman of SPDC, Precious Okolobo, in his own reaction, said the cut in oil price is a global thing and that SPDC has already concluded plans to cut its global capital spending by $15 billion from 2015 to 2017 because of the oil price cut.