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Osinbajo washes hands off $26 billion NNPC contracts

*I only approved loans for JV projects

Vice President Yemi Osinbajo, on Thursday, washed his hands off approvals of the alleged $25 billion controversial Nigeria National Petroleun Corporation (NNPC) contracts saying contrary to reports he only approved loans to finance the NNPC Joint Venture projects with oil majors in the country.

Osinbajo in a statement by Mr. Laolu Akande, senior special adviser, media and publicity listed the loan financing approvale to include; the NNPC/Chevron Joint Venture Project; the NNPC/Chevron Accelerated Upstream Production Project and the NNPC/Shell/Total/Agip Joint Venture Accelerated Upstream Production Project

“While the first was approved by the President in person, the second and third were approved by the Vice President as Acting President,” Akande said in the statement.

Osinbajo explained that “in the statement of NNPC recently released in response to allegations made by the Minister of State for Petroleum Resources, reference was made to various financing arrangements with NNPC’s Joint Venture Partners, which were approved by the Presidency under the current administration.

He Cited the NNPC Act, Cap. N. 123, Laws of the Federation, (updated to 2010), authorises the Corporation to borrow such sums as it may require in the exercise of its functions.

Explaining further, Osinbajo said “Sub section (2) goes further to specify the only precondition:

“The Corporation shall not, without the approval of the President, borrow any sum of money whereby the amount in aggregate outstanding on any loan or loans at any time exceeds such amounts as is for the time being specified by the President.”

Furthermore, subsection (4) provides that

“Where any sum required aforesaid –

  1. is to be in currency other than Naira; and
  2. is to be borrowed by the Corporation otherwise than temporarily,
    the Corporation shall not borrow the sum without the prior approval of the President.

“These financings are purely commercial loans obtained by NNPC and its Joint Venture partners, mainly from local and foreign banks, to perform their exploration and production activities. Repayments are also made out of revenues from the crude oil produced directly by the funded project. Unfortunately, they are being confused with contracts for goods and services,” he said.

“The alternative financing arrangements became necessary as inability of Government to meet its cash call obligations had stalled further investments in the petroleum sector and reduced the country’s production capacity,” he stated further.

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