The state-run Nigerian National Petroleum Corporation (NNPC) has paid the sum of $3 Billion as part of its cash call arrears in operational cost to its joint venture partnership (JVC).
The amount was paid to Exxon Mobil Corporation and Royal Dutch Shell in a bid to clear the backlog of it JVC arrears to the oil majors.
The payment is being settled through a five-year crude oil sales deal agreed in 2016, according to a statement by the state-run oil firm.
While a majority has been paid as of August, there’s still about $1.7 billion outstanding. Exxon has got $2.3 billion, clearing all dues. Shell has received $455 million but is still owed $917 million.
NNPC operates joint ventures with producers including Exxon Mobil, Shell, Chevron Corp., Total SE and Eni SpA that pump about 80 percent of Nigeria’s crude oil output.
Lower revenue and demands for other payments hampered NNPC’s ability to contribute its share of expenses from 2010 to 2015, leading to the arrears.
It still owes Eni $385 million, Total $304 million and Chevron $55 million, according to the statement.
PAID AS OF AUGUST OUTSTANDING
Exxon $2.3b none
Shell $455m outstanding $917m
Chevron $1.0bn outstanding $55m
Total $307m outstanding $304m
Eni $390m outstanding $385m
Nigeria had agreed a $5.1 billion settlement with the international oil companies four years ago. As of July 2019, NNPC had cleared $2.3 billion.
The Nigerian state-run company on October 15, published audited accounts for only the second time in its 43-year history.
The report showed its annual loss shrank to N1.7 billion compared with N280 billion in the previous year as it slashed costs across its operations.
The payments to the oil companies suggest NNPC has enough profit and cash to afford it. That’s good news for Nigeria’s oil industry, which generates about half of all government revenue. But like oil companies around the world, NNPC is also facing weak global demand because of the coronavirus and new restrictions to contain it.