By Chineme Okafor in Houston, Texas
The federal government has begun to redeem its pledge to settle outstanding joint venture cash call debts it owes International Oil Companies (IOCs) with $400 million paid last week to them, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has disclosed.
Kachikwu told reporters on Tuesday on the sidelines of the ongoing 2017 Offshore Technology Conference (OTC) in Houston, Texas, United States, that the $400 million payment was part of a $1.2 billion cash call debt owed the IOCs in 2016. This, he stated, was different from the discounted $5.1 billion cash call arrears it negotiated in December 2016 with the IOCs.
The IOCs involved in this are ExxonMobil, Shell, Nigeria Agip Oil Company (NAOC), Chevron, and Total.
The minister noted that a monthly repayment plan of $70 million has also been worked out with the Central Bank of Nigeria (CBN) to offset the $1.2 billion debt in one year. The negotiated $5.1 billion debt, he emphasised, would be repaid from incremental oil production by the IOCs.
The minister explained that on the basis of the payment, the IOCs were beginning to regain their confidence in Nigeriaâ€™s oil industry, adding that the countryâ€™s oil production could increase by 700,000 barrels per day (bd) by 2018 from the development.
More to follow..