JVC: Nigeria Owes Oil Giants $5.1bn …First Gold Refinery Construction Begins

Amidst the ongoing confusion over the cut down in Nigeria’s oil production quota, the National Petroleum Corporation (NNPC) yesterday further revealed that Nigeria is currently owing multinational oil companies $5.1billion in the Joint Venture Cash Call (JVC) business arrangements.
The NNPC has also denied the alleged mismanagement of $3.2billion withdrawn from the Nigeria Liquified Natural Gas (NLNG) account from 2015 till date.
The revelation came up during an investigative hearing between the Senate Committee on Gas and the NNPC .
The Corporation’s Chief Financial Officer (CFO) , Alhaji Isiaka Abdulrasaq, who at the meeting explained to the Senate Committee on Gas how the JVC is run , noted that the arrangement is such that the government of Nigeria controls 60% of the venture while the International Oil Companies. (IOC’s) control 40%.
His words “The problem however is that before this government came on board in 2015, Nigeria which holds 60% of shares in the joint business , for many years did not contribute its own required capital into it but only collecting its equity inform of revenues which made the country to as at 2015 having $6.8bn unpaid capital into the venture.
“But the present government in 2016 succeeded in getting 35% discount from the unpaid capital amounting to $1.9bn from the unpaid capital , making the country to be owing the IOCs $5.1bn now”, he explained .
On the alleged $3.2bn withdrawn from the NLNG account by NNPC within the last three years , the CFO said there was no mismanagement in any of the withdrawals made.
According to him, based on available records with them, the have only 13 withdrawals made from the account totalling $1.2bn.
The NNPC’s CFO however said the alleged bogus withdrawal profile being bandied has caused high apprehension amongst not less than seven out of the international oil companies dealing with NNPC as they feared there may be some problems ahead if there is mismanagement of the NLNG accounts .
However, to aide the committee’s investigation of the alleged withdrawals, the committee through its Chairman, Senator Albert Bassey Akpan , ordered the NNPC CFO to submit approving documents for all the withdrawals by Tuesday next week.
“We are not saying any money have been stolen . What we are doing is clarifying processes of expenditures made from the account with a view to making management of the account more transparent and beneficial to Nigerians “,he said.
Meanwhile, history was made in Nigeria yesterday, as the country celebrated the ground breaking of its first gold refinery by the Minister of State for Mines and Steel Development, Hon. Abubakar Bawa Bwari. The refinery being developed by indigenous minerals company, Kian Smith Trade & Co Ltd. (“Kian Smith”) in Ogun State is scheduled to start production in 2019, sourcing most of its ore from miners in the country.
“The present administration is determined to develop the mining sector to act as a catalyst for sustainable economic growth of the country,” said Hon. Bwari at the groundbreaking ceremony.
“Part of our marching orders in the Mines and Stell Development ministry is that we are expected to develop the sector to increase its contribution to the nation’s GDP, improve its capacity to create jobs and engender sustainable mining,” the minister added, stressing that it was in keeping with his ministry’s mandate that a roadmap was developed for the growth and development of the mining sector.
“During the focus labs of the Economic Recovery and Growth Plan (ERGP) of this administration, we discovered that a well organised gold value chain can trigger an economic revolution like it did in India, South Africa, Switzerland and others,” he said further. He noted that the ministry has continued to work in this light to develop a gold value chain for the country.
The refinery will start with a production capacity of 3 tonnes per month of 99.99% gold and 1 ton per month production of 99.99% silver. We will be supplying the Central Bank, the Jewellery and the Electronic Industry,” said Nere Teriba, Vice Chairman of Kian Smith at the groundbreaking ceremony.
Niger, Kaduna, Ibadan, Ile-Ife, Ilesha and about 100kg per month from other parts of Africa.
We are presently finalizing supply agreements and terms from suppliers in Kano. Next week, we will be securing supply from Kogi State,” she added.
According to Teriba, the refinery when completed will provide more than 500,000 jobs in two years as it continues to support its suppliers in their bid to become registered business entities in the mining sector.
“There’s at presently at least 1,000,000 unregistered business participants in the Nigerian market (considering gold miners, sponsors, dealers, processors, aggregators and gold-workers). The formalization, organization and development we bring to the value chain will provide quick wins to the Nigerian economy,” Teriba said.

Nneka Amaechi-Nnadi, Abuja