Barely two years after the Nigerian National Petroleum Corporation (NNPC) signed a cash-call Repayment Agreement with its Joint Venture (JV) partners to defray cash-call arrears within a period of five years, the corporation has paid $833.57 million owed to ExxonMobil’s local subsidiary, Mobil Producing Nigeria (MPN).
This development was made known in a statement by NNPC’s Spokesperson, Ndu Ughamadu, who quoted the corporation’s Group Managing Director, Dr. Maikanti Baru, to have made the disclosure at a commemorative close-out ceremony to mark the conclusion of NNPC/MPN Cash Call Repayment Agreement.
In the statement, the NNPC explained that the money settled long-standing debts owed via ‘cash calls’, or costs that it is obligated to pay to JV partners in oil and gas exploration and production.
As part of the cash-call debt, NNPC said it made up the payments of $3.95 billion to oil companies late last year (2018). Baru was quoted as saying the following;
“It is gratifying to note that within two years of this agreement, the NNPC/MPN JV significantly executed in incremental activities that generated adequate proceeds to liquidate the $833.57 million cash-call arrears, whilst ensuring that revenue flow from the JV to the Federation remained stable.”
The outgoing NNPC boss went further to explain that with the close-out of the repayment agreement, the entire incremental production which is over 45,000 barrels of oil per day (bopd) has been migrated to Federation’s equity and would invariably lead to an increase in revenue to the government.
Baru, however, noted that the payment did not in any way undercut remittances to the Federation Account, as it was achieved through revenue from incremental production.