The Nigerian National Petroleum Corporation, NNPC, has said that it had so far kept to the terms of the agreement on the $5.1 billion repayment plan entered into with international oil companies in respect of the Joint Venture Cash Call, JVCC.
This amount was higher when the government of President Buhari came in but was renegotiated to $5.1B. The initial plan was to have a oil-swap for this sum of money as the oil price then was around $30/barrel but with the stability in Niger-Delta and increase in the oil price internationally, cash seems to be available for it.
In a statement in Abuja which was issued in May this year, Group General Manager, Group Public Affairs Division of the NNPC, Mr. Ndu Ughamadu, also stated that the Federation Account Allocation Committee meeting was regularly briefed on this development and would receive a briefing update at the next scheduled FAAC engagement.
He disclosed that the NNPC was able to secure a reduction in the cash call arrears from $6.8 billion to $5.1 billion, saving the country $1.7 billion. He added that it was agreed that the balance would be paid over a five-year period through incremental crude oil production. He said: “The administration of President Muhammadu Buhari inherited a cash call arrears of $6.8 billion, unpaid by previous administrations. President Buhari subsequently directed NNPC to resolve this challenge which had led the IOC JV partners to drastically reduce investment in the Nigerian oil sector.
“Based on Mr. President’s directive, NNPC engaged the IOCs and negotiated the cash call arrears down from $6.8 billion to $5.1 billion saving the country $1.7 billion. NNPC then set a repayment plan in place. “The key point with the repayment plan was that the arrears would be repaid from incremental production over a five-year period so that base production would be preserved. “This arrangement was translated into a Repayment Agreement which was further endorsed by the Governors at National Economic Council and approved by Federal Executive Council. “To date, NNPC has kept to the terms of the Repayment Agreement.
The FAAC meeting is regularly briefed on the Repayment status and will receive a briefing update at the next scheduled FAAC engagement.”
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