NNPC pays $3.68bn, owes Total, Agip, Shell $1.01bn cash call debts

NNPC pays $3.68bn, owes Total, Agip, Shell $1.01bn cash call debts

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The Nigerian National Petroleum Company Limited has so far paid a total of $3.68bn out of the $4.689bn cash call debt to five international oil companies that are its joint venture partners.

The latest data obtained from the oil firm on Wednesday on the cash call arrears repayment showed that while the NNPC had completed the repayments to Mobil Producing Nigeria and Chevron Nigeria Limited, it was still owing three other IOCs.

The three IOCs include Shell Petroleum Development Company, Total Exploration and Production Nigeria, and Nigeria Agip Oil Company.

The outstanding balance of NNPC to the three firms, as captured in the March 2022 report put together by the oil firm and obtained by our correspondent in Abuja, was $1.01bn as of December 31, 2021.

Cash calls are sent by joint-venture operators to non-operating partners for payment in the light of anticipated future capital, operating expenditures, or the need for additional capital contributions.

The Federal Government through the NNPC had over the years piled up unpaid bills, referred to as cash calls, which it was obliged to pay the IOCs with which it had joint ventures for oil exploration and production.

It was observed that the outstanding balance of NNPC to SPDC was $595.1m, its indebtedness to TEPNG was put at $164.6m, while that of NAOC was 252.05m.

The report indicated that the National oil company had so far repaid $777.4m to SPDC out of the $1.37bn total renegotiated debt with the firm, while it had repaid $446.36m out of the $610.97m renegotiated debt to TEPNG.

For NAOC, the NNPC has been able to pay the IOC a total of $522.6m out of a renegotiated debt of $774.6m.

The report stated that NNPC has cleared the $833.75m and $1.097bn renegotiated debts to MPN and CNL respectively.

Industry analysts told our correspondent stated that the delay in the repayments of cash call arrears had hindered oil and gas investment in Nigeria.

They, however, commended the government and NNPC for the repayment of the debts, stressing that this would boost investor confidence in Nigeria.

In 2016, the national oil company signed the cash call repayment agreements with the five IOCs to defray the cash-call arrears within a period of five years after many years of its indebtedness to JV partners.

Also, the government through the Federal Ministry of Petroleum Resources negotiated a discount with the five IOCs in December 2016.

The negotiations led to the reduction of the debt from about $5.1bn to $4.68bn.

The Federal Government through the NNPC had since continued to reduce the debt payments in installments.

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