Minister: Nigeria Reaches Deal to Pay $5.1B in Unpaid Bills to Oil Majors



Reuters

ABUJA, Nov 17 (Reuters) - Nigeria has reached a deal to pay $5.1 billion in unpaid bills to oil majors including Royal Dutch Shell and Exxon Mobil, the minister of state for oil said on Thursday.

The Nigerian National Petroleum Corporation (NNPC), the OPEC member's state oil firm, has amassed a total of $6.8 billion in unpaid bills up to December 2015, so-called cash calls, that it was obliged to pay under joint ventures with Western oil firms, with which it explores for and produces oil.

Oil minister Emmanuel Ibe Kachikwu said the agreed amount, which is $1.7 billion less than the total amount owed, would be paid within five years, interest free.

Under the arrangement, payment will be in the form of crude oil cargoes but only when Nigeria's production exceeds 2.2 million barrels per day, Kachikwu said, which is the nation's current production when all fields are operating properly.

"If for any reason we did not meet (the) threshold we will not pay the $5.1 (billion), so that is fantastic," he said of the deal, which has been approved by the National Economic Council, an advisory body to the government.

Kachikwu last week said Royal Dutch Shell, Exxon Mobil, Italy's ENI, Chevron and France's Total had "accepted" what he described at the time as an "outline settlement".

All five of the oil majors declined to comment when approached by Reuters.

The petroleum ministry has for more than a year been trying to reduce its financial obligations, which have accumulated over several years. Kachikwu said there is at least $2.5 billion in additional debt that has accrued this year that it is still working to repay.

(Writing by Alexis Akwagyiram and Libby George; Editing by Alexandra Hudson and Elaine Hardcastle)



WHAT DO YOU THINK?


Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

RELATED COMPANIES
Company: Exxon Mobil Corporation more info
Operates 16 Offshore Rigs
 - ExxonMobil Jumping in to Mexico Fuel Market With First US Cargo (Dec 06)
 - ExxonMobil to Evaluate Offshore Mauritania Blocks (Dec 04)
 - ExxonMobil To Merge Refining And Marketing Divisions (Dec 01)
Company: Total S.A. more info
 - Total Starts Up Antwerp Refinery And Petrochem Complex After Upgrade (Nov 30)
 - Hoegh LNG: Pakistan LNG Import Project Consortium Folds (Nov 16)
 - France's Total Buys Engie's LNG Business For $1.5B (Nov 08)
Company: Chevron Corporation more info
 - ExxonMobil Jumping in to Mexico Fuel Market With First US Cargo (Dec 06)
 - Chevron To Study Mexican Oil Block, No Drilling Seen In First 4 Years (Nov 30)
 - Buying Texas Oil at New Mexico Prices: Majors Go West for Shale (Nov 14)
Company: ENI more info
Operates 11 Offshore Rigs
 - Italy Prosecutors Probe Eni For Tax Evasion At Refineries (Nov 22)
 - Officials: BP, Eni Interested In Developing Iraq's Majnoon Oilfield (Nov 20)
 - Eni's Giant Gas Field Prompts Egypt to End Imports in 2018 (Nov 15)
Company: Nigerian National Petroleum Corp. (NNPC) more info
 - Nigeria's State Oil Company Signs Deals With Chevron, Shell (Aug 03)
 - Nigeria To Continue Oil Exploration In Lake Chad Basin Despite Kidnapping (Jul 31)
 - Nigeria Says Has Rescued Oil Firm Staff Kidnapped By Suspected Boko Haram (Jul 26)
Company: Royal Dutch Shell plc more info
 - Shell Says Fire Extinguished At Singapore Refinery-Petchem Plant (Dec 11)
 - Sharp Fall In Applications For Norway's Arctic Oil Permits (Dec 05)
 - Pressured For Profit, Oil Majors Bet Big On Shale Technology (Nov 28)