STATE-RUN oil firm, the Nigerian National Petroleum Corporation (NNPC) is set to introduce the Incorporated Joint Venture (IJV) model to replace all the Joint Venture exploration and production projects in the country.

Its  Group Managing Director, Dr. Maikanti Baru, who spoke during  a panel session at the Nigeria Oil and Gas (NOG) Conference in Abuja, said consideration for the IJV model was borne out of the need to encourage healthy business culture and growth in the energy sector.

Baru who was represented by the firm’s Chief Operating Officer,  Bello Rabiu, said the IJV model, when implemented, would make oil and gas business more productive and beneficial to investors.

Two years after the NNPC signed a Cash-call Repayment Agreement with its JV partners to defray cash-call arrears within a period of five years, the Corporation said it has paid $833.57million to Mobil Producing Nigeria (MPN).

Baru the NNPC management came up with the novel cash-call exit strategy to boost investors’ confidence and grow the nation’s oil and gas industry, adding that the payment did not in anyway undercut remittances to the Federation Account as it was achieved through revenue from incremental production.

But he said the current alternative funding arrangement was a temporary measure and that the objective of the IJV model was to create a robust business system that allows for projects self-financing and guarantees a win-win situation for all stakeholders.

“The only option which is the same everywhere in the world is for any project or any business to fund itself and the only way it can fund itself is for the business to see itself as both funded by equity and debt. The incorporation element of IJV allows it to operate as an independent entity that can source capital to fund its projects and deliver dividends to shareholders at the end of each financial year,” he said.

Baru said the trust level between the Fedeeral Government  International Oil Companies (IOCs)had significantly improved since 2015 till date.

He noted that prompt payment of cash-call arears and other measures initiated by the corporation contributed in restoring the confidence of the IOCs.

The NNPC chief further stated that the Corporation was paying more attention to gas development due to its potentials to service the energy needs of the country and revive moribund factories in the country.

He said contrary to the current ugly trend of fuel importation,  the Corporation has developed serious strategies to produce gas in-country in sufficient quantity for both local and export markets.

According to him, proper gas development and utilisation could generate more Gross Domestic Product (GDP) to the nation far beyond what the oil contributes to the country’s economy.