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Navajo Oil and Gas Likely Headed to Council Agenda

Navajo Oil and Gas Likely Headed to Council Agenda
January 22
09:51 2016

The Navajo Nation Oil and Gas Company (NNOG) sought financial assistance from the tribal council in December, but legislation, sponsored by Budget and Finance Chairman Seth Damon, never made it to the council floor.

However, the plea for aid could be answered during the council’s winter session.

NNOG sought help in making a $6.25 million loan payment by December 30 to avoid a $500,000 penalty. Damon’s emergency legislation would have provided $5 million.

The oil and gas company’s woes began during a 2014 power struggle over who was in charge, and who had the right to remove former CEO Robert Joe.

Joe was eventually replaced as chief operating officer by former Navajo attorney general Louis Denetsosie.

However, the rancor raised during the fight led to a Navajo Supreme Court ruling, and an attempt to have the federal government step in and reverse the court’s decision.

This made the banks that had loaned NNOG $100 million, quite nervous. The banks decided to reduce the loans by about $44 million.

Documents obtained by the Navajo Times show that NNOG made about $49 million in profit during Joe’s two years as CEO, and lost about $22 million in Denetsosie’s one year at the helm.

Oil and gas officials blame the loss on plunging oil prices around the world.

In 2014, when the leadership fight was going on, a barrel of oil cost $100. Recently the price had dipped to $30.

The sharp fall in worldwide oil prices will lead the Navajo Council into making hard choices when it comes time to approve a 2016-2017 budget, according to Speaker LoRenzo Bates.

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