IOCs JVC Cash Call Debts: Kyari’s Led NNPC Deserved Commendation Says P-PESPI

The Nigerian National Petroleum Company (NNPC) Limited under the leadership of Mele Kyari has offset its cash call debts to International Oil Companies (IOCs) to the tune of $3.717 billion in the last six years, according to a new report by the national oil company.

Cash Calls Obligations, indebtedness, refers to when the operator call upon other non operating JV Partners to provide funding for the operations, Expenditures based primarily on each partner’s equity and on approved budgets.

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

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

In a well scripted NNPC presentation to the Federation Account Allocation Committee (FAAC) in April, it indicated that, has reduced the 2016 renegotiated debt to less than $1 billion.

This is very commendable, says Charles Ibiang, Chairman, Partners for Petroleum and Energy Sector Prosperity Initiative P-PESPI, in a Media release today at Abuja.

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

For the record however, the debts owed Mobil and Chevron have been fully paid by the NNPC

Mobil and Chevron had a renegotiated debt of $833.751 million and $1.097 billion respectively. Shell’s initial $1.372 billion has been reduced to $595.1 million.

While, Total’s $610.9 million has been paid and reduced to $152.06 million, and NAOC has a balance of $224 million from the initial $774.66 million in 2016.

In 2016, the NNPC 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 that this new state of affairs, where Cash calls obligations are meet, will help unfreeze new Investments and FID into the post PIA Era in the Sector.