The federal government through the Nigerian National Petroleum Corporation (NNPC) may have been unable to fund its priority projects in the oil and gas industry to the tune of $1.54 trillion, according to a document presented by the corporation to the Federation Account Allocation Committee (FAAC) in July. In the document sub-headlined “Statement of Joint Venture (JV) Cost Recovery and Government Priority Projects for June 2021”, the government stressed that the shortfall was between January and June this year. Cost recovery refers to a mechanism through which a party to an oil and gas project can recover most, if not all, of its capital and operating costs out of a specified percentage of production called ‘cost recovery oil’. Whereas the total 2021 “calendarised” financing obligation was put at $3.21 trillion, with a monthly tranche of $536 trillion, the data showed that actual dollar equivalent funding stood at $846 million as of June this year, leaving a deficit of $1.545 billion. A breakdown of the figures seen by THISDAY showed that $196.1 million of the budgeted $536 million was released in January, $168.5 million was released in February, while in March $128.101 million was made available for funding the projects.

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