Expert advises NNPC to convert JV debts to sovereign loans

Mr Bank-Anthony Okoroafor, an energy expert, has advised the Nigerian National Petroleum Corporation (NNPC) to convert about six billion dollar joint venture debt to sovereign loan.

Okoroafor who gave the advice in an interview with the News Agency of Nigeria in Abuja on Tuesday, said that it was unfortunate that the corporation could not meet up with the joint venture agreements.

A sovereign loan is when a government borrows money by issuing bonds in a foreign currency to foreign investors.

“NNPC should do the following. We should honour our JV cash calls.

“On the short term convert these debts to sovereign loans with clear timelines on payment plans, but on the long term, get away from this cash call business, reduce equity on these joint ventures to 10 per cent”, he said.

Okoroafor said that the corporation should depend more on taxes and royalties which accounted for more than 85 per cent.

He added that if the corporation was able to meet up with the JV cash calls, the sector would witness a lot of development, transparency and would be better for it.

NAN recalls that the corporation’s monthly financial report of June said that out of the N102.68 billion receipt from domestic crude oil, N49.78 billion (or 252.71 million dollars) was transferred to its Joint Venture (JV) Cash Call.

On the drop in crude oil output, he said that government must develop the Niger Delta area and create a sense of belonging among the populace.

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He added that there was the need to create a refinery belt and use the flared gas to generate 24hours electricity to the entire Niger Delta.

“Once we win the sympathy of the people and put many of the people to work, then every other thing will fall into place,’’ he said.