Group Hail Kyari-Led NNPC For Offsetting $3.7bn JV Cash Call Debt

The Chairman, Partners for Petroleum and Energy Sector Prosperity Initiative, Charles Ibiang, has hailed the Nigerian National Petroleum Company Ltd under the leadership of the Group Managing Director, Mele Kyari for offsetting its Cash Call debts to International Oil Companies to the tune of $3.717bn in the last six years.

The Chairman, P-PESPI, said this in a Media release on Sunday in Abuja.

Cash Calls obligations, indebtedness, arises when the operator call upon other non-operating JV Partners to provide funding for the operations. The expenditure is based primarily on each partner’s equity and on approved budgets.

Data from the NNPC showed that $3.717bn had been paid in the last six years out of the $4.689bn debts owed to the five joint venture partners.

Out of the $3.717 billion paid during the period under review, about $40m was paid in March 2022, leaving an outstanding balance of $971,817,730.

The NNPC in its presentation to the Federation Account Allocation Committee in April, indicated that it had reduced the 2016 renegotiated debt to less than $1bn.

Recall that the five oil majors initially owed by the NNPC were Shell Petroleum Development Company, Mobil Producing, Nigeria, Chevron Nigeria Limited, Total Exploration as well as Nigeria Agip Oil Company.

But the debts owed Mobil and Chevron have been fully paid by the NNPC

Mobil and Chevron had a renegotiated debt of $833.751m and $1.097bn respectively, while Shell’s initial $1.372bn has been reduced to $595.1m.

Total’s $610.9m has been reduced to $152.06m, while NAOC has a balance of $224m from the initial $774.66m in 2016.

In 2016, the NNPC had signed a cash call repayment agreement with its JV partners to defray cash-call arrears within five years after many years of its indebtedness to its partners.

During this period, it had consistently for years failed to meet its cash calls obligations, indebtedness, to the IOCs JVC partners, a situation the operators said caused a loss of new investments in the Nigerian petroleum sector.

P-PESPI stated in the statement that this new state of affairs, where Cash Calls obligations are met will help unfreeze new investments into the post Petroleum Industry Act era in the sector.

ENDS