Reports say the Nigerian National Petroleum Company (NNPC) paid an additional cash call arrears of $452,535,270 to its joint venture (JV) partners between November 2020 and November 2021. The figure brings the total debts the company has paid to the international oil companies (IOCs) since 2016 to $3.54 billion, according to a data drafted from the NNPC’s presentation to the Federation Account Allocation Committee (FAAC) for January 2022.
The data says among the five IOCs, which NNPC owes the arrears, Mobil and Chevron were fully paid on November 31, 2021. The figures showed that since the arrears repayments started in 2016 till November last year, Mobil and Chevron were paid a total sum of $833.7 million and $1.097 billion respectively.
But further analysis of the data indicated that out of the negotiated, total debt of $4.689 billion with the Joint Venture (JV) partners over five years ago, the nation’s apex oil company still has an outstanding balance of $1.143 billion.
The data showed that other oil companies that NNPC is yet to pay their full arrears include Shell, TotalEnergies and Nigerian Agip Oil Company (NAOC). A breakdown showed that out of the initial $1.37 billion owed Shell, $680.6 million has been paid, remaining $691.9 million.
For TotalEnergies, $411.73 million out of total debt of $610.97 million had been paid to the company as at November 31, 2021, with outstanding balance of $199.2 million. Similarly, out of a total debt of $774.6 million owed to NAOC, $522.6 million has been made to the company so far, with an outstanding balance of $252 million.
In 2016, NNPC signed a cash call repayment agreement with its Joint Venture partners to pay its cash-call arrears within five years after many years of its indebtedness to the partners.
The 2016 agreement was sequel to the fact that NNPC had consistently for years failed to meet its indebtedness to the IOCs. Oil and gas operators had said it caused loss of new investments in the country’s oil and gas sector.
Meanwhile, the Ministry of petroleum resources had negotiated a discount with the IOCs, comprising SPDC, Total, Mobil, Chevron and Agip from about $5.1 billion down to $4.68 billion and had since then continued to reduce the debt payments in installments.
In its further clarification, NNPC said that in the case of SPDC, repayment was from the price balance distribution on Project Santolina; while in the case of CNL, repayment was from price balance distribution on Projects Cheetah and Falcon.
“NNPC has fully repaid its cash call arrears to MPN and all incremental barrels have reverted to base,” it said.
The cash call arrangements, under which NNPC had to pay for its 55% to 60% share of investment in the upstream joint ventures, had been in place for over 40 years before it was restructured.
But apart from the cash call presentation before the joint committee, the NNPC in its data also explained that it would deduct N127 billion during next month’s FAAC for what it called under-recovery.
Unfortunately, the N127 billion February projected petrol subsidy payment (for January) is far less than the N270 billion netted off the company’s revenue in December 2021 which accounts for the highest under-recovery paid so far.
NNPC stated that “The November 2021 value shortfall recovery on the importation of PMS (petrol) amounted to N270,831,143,856.56. The recovery consists of the November 2021 value shortfall of N220.110.853.427.56, plus the outstanding value shortfall recovery of N50,720,290,429.00 for October 2021.
“The estimated value shortfall of N127.035,585.354.25 is to be recovered from January 2022 proceed due for sharing at the February 2022 FAAC meeting.”
NNPC’s explanation revealed that the company crude lifting of 8.31 million barrels (export & domestic crude) in November 2021 recorded a 7.78 per cent increase relative to the 7.71 barrels lifted in October 2021.
NNPC data for other receipts showed that the sum of $62.35 million, being miscellaneous receipts, including gas fees as well as interest income was received in December 2021.
By Sunday Elom
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