NNPC Shrinks Cash-call Debts To IOCs By $3.11bn
The Nigerian National Petroleum Corporation (NNPC) has so far paid a total of $3.118 billion cash-call debts owed the five major international oil companies (IOCs), leaving an outstanding debt of $1.570, according to statistics released by the corporation.
The statistics showed that NNPC funded its Joint Venture (JV) oil and gas assets as well as its priority projects to the tune of N112.14 billion in February.
This is coming as the federal government and the organised labour will reconvene by the middle of April for their negotiations to finalise decision on the adjustment of petrol price and electricity tariff.
However, tanker drivers, under the aegis of Petroleum Tanker Drivers (PTD), have threatened to withdraw services of their members if the Nigerian Association of Road Transport Owners (NARTO) fails to negotiate the renewal of the Collective Bargaining Agreement (CBA) for new working conditions for them.
NNPC stated that while the servicing of its JV assets for the month under review cost the corporation about N95.85 billion, financing of selected projects, including its search for oil in the frontier basins, gulped N16.28 billion.
In its March presentation to the Federation Account Allocation Committee (FAAC), the corporation stated that it had reduced its pre-2016 cash call arrears repayments to the International Oil companies (IOCs) to $1.57 billion as of January 31, 2021.
While the negotiated JV debt owed the major five oil multinationals stood at $4.68 billion before now, the documents indicated that about $3.118 billion had been offset by the national oil company, with $1.570 still outstanding.
In December 2016, the Ministry of Petroleum Resources had negotiated a discount with the IOCs, comprising Shell Petroleum Development Company (SPDC), Total Exploration and Production Nigeria (TEPNG), Mobil Producing Nigeria (MPN), Chevron Nigeria Limited (CNL) and Nigeria Agip Oil Company (NAOC) from about $5.1 billion down to $4.6 billion and had since then continued to reduce the debt payments.
Fresh information from the corporation revealed that SPDC, which was owed a negotiated debt of about $1.37 billion, had been paid $455.3 million as at the end of January, while TEPNG, which was owed $610.972 million, had got $364.6 million. NAOC to which the NNPC owed $774.66 million received $422.66 million and CNL got $1.042 billion out of its outstanding negotiated debt of $1.097 billion.
It added that MPN had been fully paid its outstanding $833 million and has henceforth “reverted to base” at the time of releasing the information.
As of January 31, 2021, the NNPC stated that its debt obligations to SPDC, CNL, TEPNG and NAOC respectively stood at $917.2 million, $55.4 million, $246.3 million and $351.9 million.
On its JV obligations to its partners, the figures released by the NNPC showed that it recorded a deficit or variance of N107.3 billion, falling below its actual budget of N203.1 billion for the purpose in February.
The NNPC also noted that through its subsidiary, the National Petroleum Investment Management Services (NAPIMS), it spent about N16.2 billion to rehabilitate refineries, pay its monthly obligation on the Nigeria-Morocco gas pipeline and ramp up oil search in the frontier basins.
It listed other projects funded with the N16.2 billion to include national domestic gas development, gas infrastructure development, renewable energy development, crude oil pre-export inspection agency expenses and pre-export financing.
A breakdown of the expenses showed that the refineries gulped N8.33 billion of the amount, crude oil pre-export financing received zero allocation, although N5 billion was budgeted for it, national domestic gas development was funded with N3.098 billion while gas infrastructure development took a share of N2.39 billion as against the N5 billion budgeted for it.
In addition, the corporation stated that its frontier exploration services got N1.919 billion while crude oil pre-export inspection agency expenses and pre-export financing got N393 million.
The NNPC, in the document, said it was ramping up its focus on renewable energy development financing, which gulped N117.1 million for the month, while N83.33 million financing was provided for the Nigeria-Morocco pipeline.
The pipeline, estimated to cost $25 billion, is expected to serve as an extension of the existing West African Gas Pipeline currently serving Benin, Togo and Ghana, as well as connect with Spain through Cádiz.
NNPC’s total spending on selected infrastructure, including on gas development, renewables, refineries, however, fell short by N14.2 billion when compared with the actual budget of N30 billion for February. The Brass LNG gas supply, however, did not get any funding for the month under review.